Subscribe to our free, weekly email newsletter!


Diesel prices are down for second straight week, reports EIA

By Jeff Berman, Group News Editor
March 12, 2013

The average price per gallon of diesel gasoline dropped for the second straight week, according to data released by the Department of Energy’s Energy Information Administration (EIA).

The average price per gallon fell 4.2 cents to $4.088 per gallon, on the heels of a 2.9 cent dip last week. Prior to these two weeks of declines, prices rose a cumulative 26.5 cents over a six week span.

During the week of February 25, the average price per gallon hit $4.159 per gallon, which marked the highest point for diesel prices since hitting $4.207 per gallon the week of August 18, 2008. The preceding week’s tally of $4.157 from the week of February 18 was the previous high point, topping the then-recent high of $4.116 from the week of October 22.

On an annual basis, the average price per gallon is down 3.5 cents, with the previous three weeks up 3.6 cents, 10.8 cents, and 19.7 cents, respectively.

In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.92 per gallon in 2013 and $3.82 in 2014, with WTI crude oil is expected to hit $92.81 per barrel in 2013 and $92.17 in 2014.

As previously reported, regardless of the fluctuation in diesel prices, shippers are cognizant of the impact diesel prices can have on their bottom line—for better or worse.
And they continue to be proactive on that front, too, by taking steps to reduce mileage and transit lengths when possible as well as cut down on empty miles.

And even through shippers want to adjust budgets in order to offset the increased costs higher fuel prices bring, it is not always an easy thing to manage.

The focus from a supply chain management perspective, according to shippers, is more on utilization and efficiency by doing things like driving empty miles out of transportation networks.

Shippers have told LM that adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation. 

A transportation sustainability expert told LM that the increase in diesel prices is reflective of the changes and challenges taking place within the global economy.

“As China demands more oil for their growing economy; tensions remain high in the Middle East; OPEC reduces output in an attempt to increase the price of a barrel of oil; the U.S. chooses not to build new refineries or approve the required pipeline infrastructure to take advantage of all available fuel sources; and exporting of fuel and Liquid Natural Gas continues at a slow pace, corporations will be challenged by fluctuating fuel costs,” said Brittain Ladd, a global supply chain consultant. “To minimize the impact of fuel costs, corporations need to refocus their efforts to collaborate with their trucking providers to ensure that every effort is being made to maximize equipment utilization, reduce out-of-route miles, and take advantage of fuel programs that identify the lowest diesel prices.”

Ladd also pointed out that longer term strategies continue to include optimizing logistics networks and distribution/replenishment strategies that will minimize transportation. In addition, he said corporations need to be proactive in pushing for LNG as an alternative to diesel when possible and an increase in the number of trailers that can be pulled by a tractor.

In a recent column for LM, Derik Andreoli, Ph.D.c. Senior Analyst at Mercator International, LLC, cited the American Trucking Research Institute (ATRI) whom stated fuel costs account for roughly 35 percent of average marginal costs per mile, and with diesel prices expected to remain high, competitive advantage will be bestowed on trucking companies who are best able to manage fuel consumption and contain fuel costs.

“Overall, aerodynamics may account for 15 percent to 22 percent of energy losses for a fully loaded Class 8 truck traveling at highway speeds,” wrote Andreoli. “Significant fuel savings can be realized by matching cab height to trailer height, reducing the gap between the cab and the trailer, and installing fairings on the chassis and the trailer. Additional savings can be had by rounding the corners on trailers, installing wheel covers, removing sun visors and auxiliary mirrors, and installing aerodynamic primary mirrors or rear facing video cameras.”

The price per barrel for oil is at $90.31 on the New York Mercantile Exchange at press time.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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

The International Air Transport Association (IATA) announced August 2014 data for global air freight markets showing continued “robust”growth in air cargo volumes.

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

Article Topics

News · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA