Subscribe to our free, weekly email newsletter!


Diesel prices continue to increase

By Jeff Berman, Group News Editor
September 18, 2012

Diesel prices headed up for the 11th straight week, heading up 0.3 cents to $4.135 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

This is the fifth consecutive week prices have been north of the $4 per gallon mark, which has not previously occurred since the week of May 14, when it was at $4.026 per gallon. And it is the highest price per gallon since the week of April 9, when it was at $4.148.

Prior to these recent gains, diesel prices sank for 12 straight weeks, falling a cumulative 50 cents during that period. On an annual basis, the price per gallon of diesel is up 27 cents. And over the past 11 weeks, prices are up a cumulative 48.7 cents.

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.

What’s more, shippers have repeatedly told LM they are constantly monitoring fuel prices, as they relate to freight rates and the overall costs of doing business.

And shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.

What’s more, due to the economics driving the increases in global oil prices, shippers really don’t have any choice in the matter, shippers say.

“Shippers will have to pay to get their goods to market even as the price of fuel increases,” a shipper told LM..“The fuel surcharge (FSC) is not necessarily an evil thing. Shippers need to [partner] with transportation and logistics services companies and realize that without an FSC these companies would not likely be able to stay in business…but shippers need to do their homework to determine what the actual costs are and what percent they should pay to carriers.”

The price per barrel of crude oil is currently trading at $96.14 on the New York Mercantile Exchange.

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

Company says the Cloud offering allows customers to respond more quickly to new business opportunities, without significant upfront cost and implementation times.

As e-commerce continues to take a bigger piece of the holiday package delivery pie, it stands to reason that companies need to be proactive and prepared in order to deliver premium service during the busiest time of year, which is rapidly approaching. And that is exactly what transportation giants UPS and FedEx are doing this year. How are they doing it exactly? The primary step they are taking is to up their numbers of seasonal staffers.

A recent hearing of the Subcommittee on Coast Guard and Maritime Transportation suggests that the U.S. Merchant Marine industry may be poised for a major comeback.

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

Factors such as rising freight rates, shrinking capacity, an increased desire for global supply chain visibility, have all worked together to drive the need for instituting a culture of continuous improvement in logistics operations and transportation management systems (TMS). To meet today's complex logistics challenges, managers are stepping into a more streamlined, automated approach to transportation management in order to function at optimal levels both domestically and internationally. Read the latest special report.

Article Topics

News · EIA · Diesel Prices · Diesel · 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