Transportation Update
Fuel
Diesel national average now stands at $3.883/gal. as of 5/23.
- For the 16th time in 17 weeks, the benchmark price used for most diesel fuel surcharges declined.
- Price is down 73.9 cents from the $4.622/gallon price it stood at before beginning the recent run of declines.
- Price stands at its lowest level since Jan. 31, 2022, when it was $3.846 a gallon.
- The price is $1.688 less than a year ago.
The forecast for diesel prices has again been revised down per the EIA on May 9th from their previous forecast on April 11th.
| 2023 | 2024 | |
| U.S. Retail Diesel Prices (Dollars per gallon) | $3.90 | $3.62 |
| Previous Forecast | $4.11 | $3.87 |
| Percentage Change | -4.9% | -6.4% |
In the short term, diesel is starting to see inventory levels tighten which may stall efforts to see a continued downtrend.
Truckload
A slowing economy and high inventories continue to stifle the truckload market.
- Tonnage dropped in April by 3.4% YoY
- Weakened imports are contributing to lower volumes.
- Elevated uncertainty about the economy and consumer confidence are causing businesses to be cautious about placing orders.
- Truckload demand is 1 -2% lower than one year ago while supply is 6 -7% higher.
- Until the oversupply of capacity is thinned out, rates will not increase.
- Smaller carriers have locked in dedicated contracts to survive, which has slowed attrition compared to previous downturns.
Truckload Rates
- Spot rates have fallen in 14 of the last 15 months.
- Spot rates have fallen 26% YoY.
- Spot rates fell .11/mi from March to April.
- Contracted rates fell .07/mi from March to April.
LTL
FedEx Freight stated that it will be closing 29 freight locations and furloughing certain job classes.
- Furloughs will start May 28.
- They aim to consolidate operations to adjust to market demand and changing dynamics.
- The locations are planned to be closed effective Aug. 13.
ODFL reported a 3.5% decrease in LTL services in Q1.
- They also lowered forecasts for the remainder of 2023.
UPS employees are threatening to strike at the end of July.
- Both sides are optimistic that an agreement can be reached before July 31st.
- The 24 million packages UPS ships on an average day, amounts to about a quarter of all U.S. parcel volume.
- UPS says they deliver the equivalent of about 6% of the nation’s gross domestic product.
LTL Rates
The revised LTL rate forecast is for a YoY decrease of 2.4% excluding fuel.
