Supply Chain Managers Face Another Spike in Diesel Prices

This marks the fourth consecutive week prices have been north of the $4 per gallon mark
By Jeff Berman, Group News Editor
September 11, 2012 - SCMR Editorial

While diesel prices increased for the tenth consecutive week, the pace of growth was subdued, rising 0.5 cents to $4.132 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

This marks the fourth 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.

In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.84 per gallon in 2012 and $3.62 in 2013 (down from previous estimates of $3.90 and $3.87, respectively), with WTI crude oil expected to hit $93.90 per barrel in 2012 and $90.25 in 2013 (down from previous estimates of $96.80 and $97.00, respectively).

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 Logistics Management —a sister publication—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.

The price per barrel of crude oil is currently trading at $96.54 on the New York Mercantile Exchange.



About the Author

image
Jeff Berman
Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff joined the Supply Chain Group in 2005 and leads online and print news operations for these publications. In 2009, Jeff led Logistics Management to the Silver Medal of Folio's Eddie Awards in the Best B2B Transportation/Travel Website category. 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. If you want to contact Jeff with a news tip or idea, please send an e-mail to .(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

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

The market for supply chain management software continues to expand, highlighting the importance of software in today’s supply chains.

Amid the talk and coverage about things negatively impacting the trucking industry like increasing regulations, tight capacity, and equipment-related issues and challenges, there is one thing to always remember about the sector: it moves a lot of freight, make that more than a lot, actually.

In an effort to increase territorial coverage, improve transit time, and augment service quality in Brazil, UPS recently announced it has made significant service expansions with the opening of nine new operating facilities in the state of São Paulo.

Article Topics

News · Management · EPA · Logistics · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.