Transport-Centric Macroeconomic Metrics: October 9, 2020 Update

West Texas Intermediate crude oil continues to trade around $40 / barrel, which is helping to keep diesel prices low.  One must ask how long this period of low cost, low variability in diesel will last.

A bright spot for ground shippers and carriers is the continued low cost of diesel.  The DOE national average  has been within 4 cents of $2.40 / gallon since April.  (Data Source:  EIA)

Both spot and contract rates have risen dramatically since May.  Average National dry van spot rates are now up .77 / mile since their lows this spring.  

Industry experts believe that we will start to see a leveling out of the spot market, but they believe that rates will remain elevated.  As we get into TL contracting season, one would anticipate the TL carriers asking for substantial rate increases to bring the SPOT/CONTRACT rate delta back into balance.

Spot rates from Asia have continued their dramatic rise and are now up 205% YoY on the Asia to US West Coast trade lanes.  Asia to US East coast spot are at  historical levels as well, at just under $5000 / FEU.  

The rise is attributed to both a reduction in ocean capacity initiated by COV as well as Chinese exporters pushing product to the US in belief that additional sanctions are being considered.