Is Transportation coming back to “Normal?”

Truck rates are down, ocean carriers are charging less (See graph) and package volume is down. Does this mean we are returning to a more normal time?  My answer is “no.”  There are a number of new and not-so-nice headwinds or factors, affecting supply chain: Lower labor participation rates haven’t gotten back to 2019 levels. […]

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More humping

While 2 unions are threatening a walkout this week, if there isn’t a stoppage, there will be more humping. Even if there is a stoppage, when they come back to work, there will be more humping. Before your mind goes in the wrong direction, humping is a way of sorting rail cars onto trains that […]

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Good news and bad news on Diesel Prices

Good News (Price will go down):  Today: Crude oil prices are way down + refiners’ margins are down by ~50% Future: High prices ~$100/barrel for oil and $9+ for gas mean that economically recoverable reserves rise. e.g. Eagle Ford sees a fifteen-fold increase from 0.5 billion barrels to 8.4 billion barrels  Bad news: Refineries that […]

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Freight rates on their way down?

The Cass freight index appears to show expenditures and Shipments tracking fairly closely. The same is not true for bulk ocean freight. The London-based Baltic Exchange index is a weighted average based on 11-20 international ship routes and three commodities – coal, iron ore, and grain that measures the spot market for ocean shipping. Capesize […]

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This week diesel price, comparing last week´s and the last year´s

Obvious yes— but it still hurts

American Transportation Research reports trucking operating costs = $1.855 per mile, a 12.7% year-over-year increase only slightly offset by a 14.8% decrease in deadhead mileage   Trucking companies hired about 73,000 new workers in the 12 months ended in July. In a time of shortage, how did they do that? Econ 101 says — “simply […]

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Walmart squeezes suppliers

  Many smaller suppliers agreed to have Walmart handle their freight (to Walmart DCs and stores, of course). What I hear is that Walmart is not a totally reliable provider of transportation and some gripe that they are paying fines for this unreliable performance. Now, the plot thickens. New charges include: A collect pickup fee […]

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Shame on the government (EIA)

The EIA (Energy Information Administration), which is responsible for publishing the weekly diesel fuel costs, has failed in this simple duty for June 20, June 27, and July 4. “Unfortunately, we will not be able to publish those figures by the next scheduled release date of July 5.” This is hard on both shippers and carriers alike. […]

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No wonder we don’t get more oil production in the US

January 2020: All leasing of Federal land for oil and gas exploration was stopped June 2021: the courts intervened saying the Department of the Interior was breaking the law. The Department appealed but lost again November 2021: Interior sold some offshore leases February 2022: Court intervened again— no one considered the greenhouse gases for oil […]

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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. Here is a tidbit on tankers from the EIA: […]

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