Diesel prices head up for the first time in seven weeks, reports EIA
July 09, 2013
For the first time in seven weeks, diesel prices did something different: they went up.
The Department of Energy’s Energy Information Administration (EIA) reported this week that the average price per gallon of diesel gasoline rose 1.1 cents to $3.828 per gallon, snapping a six-week stretch of declines that saw prices fall a cumulative 7.3 cents.
Last week, the average price per gallon dipped 2.1 cents, which was the largest weekly decline in 2013 and the steepest one over the six weeks of downward prices prior to this week.
The six straight weeks of declines were preceded by a two-week stretch which saw prices rise a cumulative 4.5 cents.
Prior to the two-week stretch of increases, diesel prices declined for ten straight weeks and dropped a cumulative 31.4 cents. Prior to the previous ten weeks of declining prices, diesel prices rose a cumulative 26.5 cents over a six week span. And on an annual basis, the average price per gallon is up 16.9 cents.
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.
Shippers have told LM that adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation.
UPS Freight President Jack Holmes said at the eyefortransport 3PL Summit that fuel increases need to be taken into account as part of the shipper-carrier relationship.
“A carrier—who is a partner—simply passing expenses on to [a shipper] is not in my opinion a carrier you want to do business with,” said Holmes. “The one you want to do business with is the one who will tell you ‘this is what has happened and here is what we will do to mitigate that expense’ and hopefully you do things on fuel efficiency and idle time that get you closer to negating the impact of those things on your business but those are the differences between a vendor relationship and a partner relationship—which does things to help each other.”
When asked if they expect to pay higher fuel surcharges in the coming months, a recent Logistics Management reader study of roughly 420 shippers found that 39.1 percent said yes they did, 44.1 percent said they did not expect to have to pay higher fuel surcharges, with 16.8 percent stating they were unsure.
The average price of crude oil on the New York Mercantile Exchange fell to $102.95 as of press time, with the price last week topping the $100 per barrel mark for the first time since May 2012. The Associated Press reported that the price jumped last week, “due to worries that turmoil in Egypt could disrupt oil and gas shipments through the Suez Canal.”
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