OIL – WEST TEXAS INTERMEDIATE (WTI) CRUDE
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.
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)
DAT VAN RATES
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.
OCEAN CONTAINER – EAST ASIA TO US (EAST AND WEST COAST)
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.
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.
