We are beginning to see the impact of the global shutdown in some of the transport-centric macroeconomic metrics. Below are some factors that we are following that you may find of interest.
National Diesel Prices
Diesel has now fallen 14 consecutive weeks to a national average of 2.51 as of April 13th. This is the lowest diesel has been since July 2017.
Oil – West Texas Intermediate (WTI) Crude
West Texas Intermediate crude oil has fallen below $20 / barrel. Prices have not been this low since 1998. Global demand has fallen and inventories are extremely high. We expect that oil prices will not recover quickly even if demand rises due to the inventory overhang.
Ocean Container – East Asia to US (East and West Coast)
Container rates from Asia to the US are stable. While demand has fallen, rates are being held up by a record number of blank sailings.
DAT Van Rates
TL Spot and contract rates continue to fall. Industrial, consumer discretionary, energy and large sections of retail have largely ceased operations.
Unlike the steamship lines, the fragmented nature of trucking means it is very difficult to reduce capacity in an orchestrated way. This implies there will be further rate compression.
Mike Mulqueen is a Partner at JBF Consulting and leads the Logistics Technology Strategy practice. JBF Consulting is a unique supply chain execution consultancy of TMS experts. Sign up here to receive the JBF Freight Transportation Bulletin, published monthly: http://bit.ly/JBFbulletin2020.
Founded in 2003, JBF Consulting is a supply chain execution strategy and systems integrator to logistics-intensive companies of every size and any industry. Our background and deep experience in the field of packaged logistics technology implementation positions us as industry leaders whose craftsmanship exceeds our client expectations. We expedite the transformation of supply chains through logistics & technology strategy, packaged & bespoke software implementation, and analytics & optimization. For more information, visit us at www.jbf-consulting.com