Tom Moore's blog

Freight rates up and down

The good news:  The Cass Freight Index declined 0.5% year-over-year in April.

The bad news: Petroleum product tanker rates for routes originating in Europe rose to record highs in April 2022.  And this is important because of how we balance fuel stocks between Europe and the US.  

 

Why the price of diesel has risen faster than gasoline?

From the EIA: "We expect prices for gasoline, distillate fuel oil, and jet fuel to begin decreasing after May as refinery maintenance from April comes to an end, increasing production and reducing some of the pressure on prices in the current market.” That’s the good news.

 

The bad news is in the following graph:

The Fallacy of Transportation Contracts

Most contracts read like this: “we’ll give the carrier x lots per year (maybe) and the carrier will accept some of them if they feel like it.”  Sounds like a great basis for a partnership.  So, what is happening:

Diesel $5.509 (A record) + Amazon fighting unions

The second Staten Island Amazon distribution center rejected the union by a factor of 68% to 32% — wait, there is more. Amazon is challenging the other election where the union won by, amongst other things, attacking the NLRB (National Labor Relation Board). Their 25 objections include

Helping cut the driver shortage

Last year at CSCMP, Unilever spoke of freeing truck drivers (and trucks) by increasing load size — they use our AutoO2 tool to do that. But here is another way that helps solve 2 problems:

No pain like the fuel pain

Diesel: $5.07 (down 7 cents).

But, in March fuel prices were up 27%! Are brokers passing fuel surcharges (FSC) on fast enough? By their very nature, FSC is in arrears—so when prices rise fast, the carrier is playing catchup—add delays (e.g. from a broker) and carriers have a cash crunch.

Victory for 3PL’s

While it was overshadowed by the union win against Amazon, something good came out of the Senate: David Weil’s nomination for the Labor Department’s Wage and Hour Division was defeated.

This is a victory for 3PL’s and everybody who uses contractors in the supply chain. Recall Mr. Weil did the same job for Obama and authored the “joint-employer guidance:” 

Are carrier costs really softening?

Several sources have commented that spot truckload rates have leveled off or have even declined. This may be true, but savings are being masked by fuel surcharges running 65 cents per mile (dry van) — up 19 cents from February and 33 cents more than March 2021. Companies renegotiating annual contracts are certainly not feeling any love. 


T|WO is helping refugees

I'm proud of the team.
Rafal, who lives 50 miles from the Ukrainian border, set up a table next to the crossing and gave away toys to children coming across the border. Members of the T|WO team sent money to support Rafal with these gestures of kindness. 

 

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