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.
About the Author
Mike Mulqueen is the Executive Principal of Strategy & Innovation at JBF Consulting. Mike is a leading expert in logistics solutions with over 30 years managing, designing and implementing freight transport technology. His functional expertise is in Multi-modal Transportation Management, Supply Chain Visibility, and Transportation Modeling. Mike earned his master’s degree in engineering and logistics from MIT and BS in business and marketing from University of Maryland.
About JBF Consulting
Since 2003, we’ve been helping shippers of all sizes and across many industries select, implement and squeeze as much value as possible out of their logistics systems. We speak your language — not consultant-speak – and we get to know you. Our leadership team has over 100 years of logistics and TMS implementation experience. Because we operate in a niche — we’re not all things to all people — our team members have a very specialized skill set: logistics operations experience + transportation technology + communication and problem-solving skills + a bunch of other cool stuff.
