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.
Mike Mulqueen 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, Integrated Logistics (Fleet), 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.
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