Subscribe to our free, weekly email newsletter!


Transportation news: Diesel prices head down for second straight week

By Jeff Berman, Group News Editor
May 17, 2011

Diesel prices decreased for just the fourth time in the last 24 weeks—and the second consecutive week—with a 4.3 cent decline to $4.061 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

This follows a 2 cent dip last week, which dropped the average price per gallon to $4.104. When diesel hit $4.078 per gallon the week of April 11, it marked the first time diesel has been above the $4 per gallon mark since the week of September 15, 2008, when it hit $4.023.

On an annual basis, the price per gallon for diesel is up $0.97 per gallon.

For a variety of reasons, including political and civil unrest in the Middle East and North Africa, diesel prices and the price per gallon for both diesel and regular gasoline has been on the rise over the last six months. And the average price per barrel for oil is currently trading at $96.21 per barrel on the New York Mercantile Exchange, dropping sharply since a two-and-a-half year high at $114.83 per barrel two weeks ago.

This current decline, according to industry analysts, could be due to a softening in demand, given a May 12 report from the EIA which indicated that the country’s crude inventories rose by 3.8 million barrels in the first week of May, and that gasoline stockpiles rose 1.3 million barrels, suggesting demand for crude and gasoline is softening, according to a Dow Jones report.

At the NASSTRAC Logistics Conference and Expo in Orlando, Fla. in April, shippers and carriers both expressed ongoing concern about the price of diesel and oil. While many said prices at current levels are still digestible, they cautioned that could quickly change depending on how quickly prices rise with summer driving season approaching.

In terms of how these prices can impact supply chain and logistics operations at a time when freight volumes are showing slow but consistent growth, many shippers have expressed concern about the pace of these diesel increases, explaining that if prices continue to rise at their current pace, it has 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.

“We are doing whatever we can to off-set the impact of high fuel prices,” a consumer package goods shipper told LM. “Even though prices are down for now, they are still higher than a year ago and that forces us to approach things differently.”

Click here for more articles on diesel prices.

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

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

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