Market Update September 21, 2022
US Domestic Trucking
9-week decline in DOE/EIA diesel price ends on big jump. The benchmark Department of Energy/Energy Information Administration diesel price moved up Monday after a nine-week run of decreases. Compared to recent gains in the price of ultra low sulfur diesel on futures and wholesale markets, the increase of 20.6 cents a gallon to $5.115 seems almost puny. For example, since a settlement Aug. 15 of $3.4403 per gallon, ULSD on the CME commodity exchange, through Friday’s settlement of $4.0076 a gallon, increased by more than 56.7 cents a gallon. Even with a 20-cent-plus increase, the higher number was just the fourth-largest weekly increase in the volatile market that began with the lead-up to Russia’s invasion of Ukraine. But after nine weeks of declines that totaled more than 90 cents, a more than 20 cents reversal in one week is significant.
The national average price of diesel slid 6.9 cents to $4.964 a gallon in its third straight decline, according to Energy Information Administration data released Sept. 19. The average cost settled below $5 a gallon for the first time since it was $4.909 on Aug. 22. The last time trucking’s main fuel was below $4 was Feb. 7, when a gallon cost $3.951. Diesel still costs $1.571 more than it did at this time in 2021. The average price fell in all 10 regions in EIA’s weekly survey, with the Midwest showing the largest drop (9 cents) and California the smallest (1.5 cents). California still has the most expensive diesel in the country at $6.149 a gallon, or 53.7 cents more than the West Coast.
Air Freight
DHL and NYU Stern School of Business have published the new DHL Trade Growth Atlas, which maps the most important trends and prospects of global trade in goods. The report covers 173 countries, providing valuable business intelligence for policymakers and industry leaders. It shines a positive light on the resilience of global trade – despite recent shocks and market pessimism. Among the key takeaways, the DHL Trade Growth Atlas found the Covid-19 pandemic has not been the major setback for global trade that many anticipated: International trade in goods has surged as high as 10% above pre-pandemic levels, even in the face of significant supply bottlenecks that constrained further growth. Similarly, prospects for future trade growth remain surprisingly positive: Due to the war in Ukraine, trade growth forecasts have been downgraded, but they still call for trade to grow slightly faster in 2022 and 2023 than it did over the preceding decade.
Ocean Freight
Vessels serving American Trade continue to be steady and well utilized. Congestion continues to occur, causing delays on the USA, Canada and Mexico trades. import Volumes remain high, with no improvement expected in the short term.
An eight-day strike is taking place at the UK port of Felixstowe. At the UK's largest container port, nearly 2000 workers have been on strike since August 21, demanding a better pay. A number of shipping companies, including Maersk and Cocsco, will not be making calls during this period. At the same time, the UK port of Liverpool is planning similar protests.
Chassis shortages on the East Coast continue to cause severe capacity constraints in most intermodal ramps. Off-Market ramps are being hit especially hard as the dray capacities are dominated by smaller trucking companies that rely on chassis pools rather then owning private chassis. M&P has access to private chassis in many of the major and off-market intermodal markets, please reach out today if you are in need of urgent help.
