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

Does your organization struggle with the integration of information between your internal systems, processes and partner portals? You're not alone! Kapow Software alongside EFT has surveyed over 200 organizations regarding the importance of information access, visibility and discusses some of the major goals for supply chain and logistics organizations.

The U.S. Department of State maintained Thailand’s Tier 3 ranking, the lowest category, in its annual Trafficking in Persons (TIP) Report, which was released this week.

During this webcast we'll explore how supply chain execution convergence (SCEC) helps break down the barriers resulting from disparate, fragmented technology solutions allowing you to more effectively serve customers, adapt to changing business cycles, and save both money and resources.

Between a consumer-led revolution, competition from Amazon, international sourcing, and port shutdowns, retail supply chains are challenged like never before. A new e-book and self-assessment tool offer benchmarks and insights into how supply chains can keep up with the retail consumer.

The report, entitled “U.S. Freight Transportation Forecast to 2026, which is drafted by ATA and IHS Global Insight, calls for a 28.6 percent hike in annual freight tonnage, as well as a 74.5 percent gain in freight revenues to $152 trillion in 2026.

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