The average price per gallon of diesel gasoline is only heading in one direction of late: up.
According to data released this week by the Department of Energy’s Energy Information Administration (EIA), diesel jumped up 5.3 cents to $4.157 per gallon, marking the fifth straight weekly gain. What’s more, prices have gone up a cumulative 23 cents during that period and 17.7 cents in the past three weeks alone.
This week’s price is the high point for diesel since checking in at $4.207 per gallon the week of August 18, 2008, and it tops the previous recent high of $4.116 from the week of October 22.
The average price per gallon is up 19.7 cents compared to a year ago at this time.
In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.92 per gallon in 2013 and $3.82 in 2014, with WTI crude oil is expected to hit $92.81 per barrel in 2013 and $92.17 in 2014.
As previously reported, 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.
The focus from a supply chain management perspective, according to shippers, is more on utilization and efficiency by doing things like driving empty miles out of transportation networks.
Shippers have told LM that adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation.
A transportation sustainability expert told LM that the increase in diesel prices is reflective of the changes and challenges taking place within the global economy.
“As China demands more oil for their growing economy; tensions remain high in the Middle East; OPEC reduces output in an attempt to increase the price of a barrel of oil; the U.S. chooses not to build new refineries or approve the required pipeline infrastructure to take advantage of all available fuel sources; and exporting of fuel and Liquid Natural Gas continues at a slow pace, corporations will be challenged by fluctuating fuel costs,” said Brittain Ladd, a global supply chain consultant. “To minimize the impact of fuel costs, corporations need to refocus their efforts to collaborate with their trucking providers to ensure that every effort is being made to maximize equipment utilization, reduce out-of-route miles, and take advantage of fuel programs that identify the lowest diesel prices.”
Ladd also pointed out that longer term strategies continue to include optimizing logistics networks and distribution/replenishment strategies that will minimize transportation. In addition, he said corporations need to be proactive in pushing for LNG as an alternative to diesel when possible and an increase in the number of trailers that can be pulled by a tractor.
The price per barrel for oil is at $96.91 on the New York Mercantile Exchange.