Diesel prices fall below $4 per gallon mark
The average price per gallon fell 1.5 cents to $3.988, following a 1.8 cent decline to $4.003 last week.
in the NewsState of Logistics 2016: Pursue mutual benefit Global beverage packaging market to reach $200 billion in 2017 MHI 2016: Listening to the voice of the customer MHI announces Modex 2018 exhibit space draw Cart design resolves pipe and valve manufacturer’s safety and efficiency issues More News
Diesel prices dipped for the third time in four weeks, according to the Department of Energy’s Energy Information Administration (EIA).
The average price per gallon fell 1.5 cents to $3.988, following a 1.8 cent decline to $4.003 last week. During the week of March 10, the average price per gallon was up 0.5 cents to 4.021, which marked the highest average price per gallon since checking in at $4.047 the week of March 18, 2013. And in the seven weeks prior to that prices increased a cumulative 14.0 cents.
This decline snaps a four-week stretch from February 24 to March 17 in which prices topped the $4 per gallon mark.
On an annual basis, the average price per gallon of diesel is down 1.8 cents, and on a year-to-date basis, it is up 7.8 cents (since the week of January 6).
As prices continue 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.
As previously reported by LM, 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.
And the fact that if prices rise on average has a direct effect on fuel surcharges paid by shippers is always top of mind for them.
“Continued increases in fuel surcharge will drive shippers ultimate transportation spend to all time highs,” a shipper said in an interview. “Carriers will do all they can to pass any excess cost back to the shipper, smaller carriers are definitely feeling 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. 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!
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction? Badcock Home Furniture &more: Out with paper, in with Cloud TMS View More From this Issue