Subscribe to our free, weekly email newsletter!


Diesel prices are down for the fourth time in six weeks

By Jeff Berman, Group News Editor
October 30, 2012

Diesel prices trended down for the fourth time in the last six weeks, dropping 8.6 cents to $4.030 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

This follows a 3.4 cent fall from the week of October 22 and a 5.6 cent gain during the week of October 15 to $4.15 per gallon, which is the highest price since the week of August 18, 2008, when prices were $4.207 per gallon.

In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.96 per gallon in 2012 and $3.73 in 2013, with WTI crude oil expected to hit $95.66 per barrel in 2012 and $92.63 in 2013.

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.

With fuel prices, for the most part seeing steady gains, 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.

A retail shipper recently told LM that his company absorbs the volatility in fuel prices though its fuel surcharge plan rather than hedging or being active with futures contracts due to the fact that it is not free or easy. And while it does reduce volatility, he said it does not always save money for shippers.

“The way we try to mitigate fuel prices is by how we set up our overall network, which is a highly optimized network of distribution centers and stores and fulfillment centers…which allows us to maximize our destiny,” he said.

Oil barrel prices on the New York Mercantile Exchange were at $86.04 at press time. The Associated Press reported that the price of oil recovered slowly even with Hurricane Sandy making a significant impact on the East Coast and reducing demand for fuel by keeping drivers off roads, closing businesses and silencing activity in New York City and other metropolitan areas.

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

Mexico's growing importance in the continental supply chain is now being recognized by North American transportation groups

Satish Jindel, president of Pittsburgh-based SJ Consulting, says that one way for LTL carriers to improve both their bottom lines and overall productivity is to get a better grasp on the cost of handling a shipment and the pricing they have for it.

Falling 5.5 cents to $2.668 per gallon, this follows last week’s 5.9 cent decline for the lowest weekly average price going back to the week of October 14, 2009, when it was at $2.60 per gallon.

With the latest round of Trans-Pacific Partnership (TPP) negotiations in Maui, Hawaii ending without a deal, U.S. supply managers may be adjusting to other global sourcing strategies.

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

Article Topics

News · EIA · Diesel Prices · Diesel · 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