NATIONAL DIESEL PRICES
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)
OIL - WEST TEXAS INTERMEDIATE (WTI) CRUDE
West Texas Intermediate crude oil futures continue to trade around $40 / barrel, hitting around $36 / barrel in early November before bouncing back up to around $41 as of Nov 17th.
Given the long duration of WTI trading in a narrow range, I am curious if anyone is using the lowering volatility quotient as a catalyst for developing a hedging strategy. If so, let me know!
DAT VAN RATES
As we head into the holiday season, we continue to see spot and contract rates continue to rise. We are also seeing tender rejections rates increase as carriers are able to use the spot market to drive more revenue and better margins.
For longer haul loads (i.e. > 750 miles), we recommend looking at intermodal as an option, as IM rates have remained somewhat depressed as compared to TL. (Source DAT)
OCEAN CONTAINER - EAST ASIA TO US (EAST AND WEST COAST)
The good news is that FEU spot rates have stabilized on the Asia to East and West coast trade lanes, but unfortunately, they have stabilized at historically high prices.
One opportunity to consider is the use of east coast ports for freight destined for the eastern portion of the US.
Historically, the cost delta (WC rates vs EC rates) has been $1100 - $1300, but is is now < $900. Add in the additional cost of moving the west coast freight across the country using high-demand TL services and east coast options become more attractive.
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.
