Subscribe to our free, weekly email newsletter!


Diesel heads down for first time in three weeks, EIA reports

By Staff
July 08, 2014

Following two weeks of increases during which it saw a cumulative 3.8 cent increase, the Department of Energy’s Energy Information Administration (EIA) reported this week that the average price per gallon of diesel dropped 0.7 cents to $3.913 per gallon.

This decrease follows 3.7 cents and 0.1 cents declines over the previous two weeks and was preceded by a cumulative 9.3 cent decline over seven weeks.

Diesel is up 8.5 cents annually and is up 0.3 cents year-to-date going back to January 6.

In its recently-issued Short Term Energy Outlook, the EIA pegged the average price for diesel prices in 2014 at $3.90 and $3.78 in 2015, with crude oil at $98.67 per barrel in 2014 and $90.92 in 2015.

As LM has reported, with prices continuing to hover around the $4 per gallon mark adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation, according to shippers.

In some cases they look for hedge diesel prices when it is applicable, shippers have told LM. This involves committing to a certain price on fuel at which pay to a certain rate at which point it is frozen at that rate for the shipper. And it also requires shippers to be focused on keeping their drivers on the road as much they can and being profitable and
not in detention.

Other steps being taken by shippers to combat high fuel prices include things like focusing more on utilization and efficiency by doing things like driving empty miles out of transportation networks.

A shipper told LM that if prices going forward were to head up that carriers will do all they can to pass any excess cost back to the shipper, with smaller carriers likely to feel the pain associated with the fuel increase and are demanding more for their services.

“When it becomes time to negotiate rates, carriers will be talking a lot about the cost of fuel and using it as a leverage point for general rate and line haul increases,” the shipper said.  “Shippers must be acutely aware of what percentage of their invoice cost is actual fuel surcharge.”

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Disruptions at West Coast ports, which were resolved at the end of February, may have distorted the numbers

Growth firmly remains in the cards for both the manufacturing and non-manufacturing sectors in 2015. That was the main takeaway from the December 2014 Semiannual Economic Forecast from the Institute for Supply Management (ISM), which, in many ways, picked up where its companion Spring 2014 report published last April left off.

First quarter revenue of $1.776 billion was down 4.8 percent annually but up 4.6 percent in constant currency. And adjusted EBITDA at $51 million saw an 18.6 percent annual gain, with a 23.3 percent increase in constant currency.

Heading into 2015, the intermodal sector was faced with the same challenges it had exiting 2014, namely the West Coast port labor disruption and harsh winter weather. But even with these obstacles volumes still managed to show overall growth on an annual basis, according to the most recent edition of the Intermodal Market Trends & Statistics Report from the Intermodal Association of North America (IANA).

Forget cost cutting. Innovation and sustainability are the most important factors in business today. The companies that get it right can still win in a flat economy, says ISM CEO Tom Derry.

Article Topics

News · EIA · Diesel Prices · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA