Trucking rates are shifting into high gear.

     Spurred by a strengthening economy and rising diesel-fuel prices, many trucking companies are imposing their steepest price increases in years.  For example Schneider National Inc. one of the largest U.S. trucking carriers, says customer demand exceeds its supply of 14,000 tractors and 40,000 trailers by as much as 10%.

     As delivery contracts with customers come up for renewal, closely held Schneider, based in Green Bay, Wis., is boosting shipping rates by 5% to 7%.  "The market for trucks is so tight we are able to pass along higher costs," said Tom Nightingale, Schneider;s vice president of corporate marketing.

     Trucks are the workhorses of U.S. freight movement, hauling raw materials and finished products between ports, factories, distribution centers and stores.  The trucking industry generates more than 80% of the total U.S. freight bill of $580 billion.

     So far, the shortage of trucks doesn't appear to be disrupting supply chains, though some customers are being forced to schedule pickups two days in advance, instead of the same-day service they could expect when business was slower.  Still, the consequences of surging trucking rates are starting to ripple across the wider economy, including higher retail prices for some products,

     "This is the most severe year we have seen in many years" for trucking costs, said Carroll King, director of logistics at Hormel Foods Corp.   The Austin, Minn., food processor is passing along its higher transportation expenses as part of a 4.5% to 6.5% price increase in June on Spam canned meat and hundreds of other packaged foods.

     The trucking industry's pricing power is being fueled largely by businesses that are increasing production and replenishing inventories thinned during the economic slump, creating more cargo for trucks.  A shake-out in the trucking industry, including thousands of bankruptcies over the past few years, also reduced the supply of trucks.  Trucking companies aren't rushing to add trucks to their fleets because of a shortage of truck drivers.

     At the same time, trucking companies face mounting costs ranging from driver pay to fuel.  But many carriers are finding that they now have enough muscle over customers to avoid absorbing those steeper expenses on their own, as they often did in the past when fuel prices soared.  Because of the tight market, the industry's fuel surcharges- temporary price increasers on top of contracted rates- generally are sticking.

     As a result, Thomas Albrecht, an analysts at BB&T Capital Markets, expects trucking companies to boost rates by 8% to 10% this year, including fuel surcharges.  With their leverage growing, some trucking firms are concentration their drivers and equipment on routes that best fit their networks, according to customers, while avoiding customers in more remote locations.  Customers say they feel pressure to make things more efficient for the truckers.

     Building-materials make Owens Corning of Toledo, Ohio, this week expanded a Web portal that gives trucking companies status reports on upcoming or in-process freight shipments.  The company plans to launch next week an appointment system for trucks so that drivers won't have to wait in line when they arrive at an Owens Corning facility, said John Gentle, the company's global leader of carrier relations.

     Steve Feliccia, direction of logistics at PolyOne Corp., Avon Lake, Ohio said he is negotiating how much of a premium the maker of polymers and chemicals will have to pay to reserve additional trucks in the peak September and October shipping months.  PolyOne already gives truckers two days' notice whenever it needs trucks instead of calling the same day.