Diesel Rises 3.4¢ to $4.177
Gasoline Rises 9.5¢ to Fifth Straight Record
By Dan Leone, Staff Reporter
This story appears in the May 5 print edition of Transport Topics.
U.S. retail diesel prices set a record for the third consecutive week as the national average rose 3.4 cents a gallon to $4.177, according to data from the Department of Energy.
At the same time, gasoline rose 9.5 cents to $3,603 a gallon, marking the fifth consecutive record for that fuel. The price reports are from DOE’s April 28 weekly survey of filling stations.
While crude oil dipped nearly $5 a barrel last week from its all-time record to about $114 a barrel on the New York Mercantile Exchange, it remained more than $50 a barrel more expensive than the corresponding time last year.
The latest increase in diesel left commercial trucking’s main fuel $1.366 above the corresponding week of 2007. At an estimated burn rate of 730 million gallons a week, trucking companies paid just under $1 billion more for their fuel last week than in the corresponding week of 2007.
“Diesel supplies are still the issue right now” that is pushing prices upward, said Phil Flynn, an energy analyst with Alaron Trading Corp. in Chicago.
DOE figures also show the diesel average has gained more through the first four months of this year than it did in all of 2007. Between Jan. 1 and April 28, the average price of diesel fuel rose 80.1 cents a gallon. During 2007, the diesel average increased 76.5 cents.
“World distillate markets . . . have been unusually tight this year, placing extra pressure on U.S. diesel and heating oil prices over and above the high price of crude oil,” DOE’s Energy Information Administration said in its weekly release.
Flynn, the Alaron analyst, said harsh winter weather in the United States and Europe siphoned off distillate stocks to meet demand for heating oil, further pressuring diesel prices that already were inflated because of historic crude oil costs. “It seems that refiners are more worried about building diesel supply than gasoline.”
DOE said distillate stocks were 105.8 million barrels of as April 25, well below the 117.1 million barrels reported a year ago. Similarly, crude oil stockpiles were 319.9 million barrels compared with 335.6 million barrels in 2007.
At the same time, the average gasoline price is up 63.2 cents year-over-year after five consecutive increases that have pushed the average up 34.4 cents since the end of March, DOE said.
At those prices, the trucking industry, which consumes about 290 million gallons of gas a week, spent about $180 million more for gasoline last week than it did a year ago.
With the cost of diesel rising rapidly to unprecedented levels, fully recovering costs with a surcharge has become almost impossible, one carrier said.
Jack Waldock, president of Ohio Eastern Express in Sandusky, Ohio, said that over the past decade his company’s monthly fuel bill has ballooned to about $240,000 from about $56,000.
The carrier’s current fuel surcharges, which range from 57 cents a mile to 85 cents a mile cover “roughly half of that,” Waldock said.
“Fuel surcharges are roughly 26 cents a mile short of the mark,” partially because “there’s going to be at least 75 miles of deadhead” associated with every load, Waldock said.
He said his trucks “will not deadhead more than 100 miles for a load.” With an average length of haul of 525 miles, that means Ohio Eastern must rely on less-profitable brokered freight for backhauls, he said.
“Ten years ago, you didn’t think twice about bringing 10 [empty] trucks back to Ohio from the East Coast to pick up a load,” said Waldock.
Several more publicly traded motor carriers said the drastic increase in fuel prices had hurt their most recent quarterly earnings.
“Record diesel fuel prices, which soared late in the quarter, adversely affected earnings-per-share by 10 cents, compared with the prior year’s quarter,” Steve Russell, chief executive officer of truckload carrier Celadon Group, said in the company’s fiscal third-quarter earnings report.
Likewise, truckload carrier Heartland Express said its fuel costs in the first quarter soared 41.6% above year-ago levels and drove per-share earnings down by about 3 cents a share.
Heartland, Coralville, Iowa, and Celadon, Indianapolis, rank No. 45 and No. 56, respectively, on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.
The high fuel prices again sparked public protests by some truck drivers last week, The Associated Press reported.
On April 28, a group of truckers descended on Washington, D.C., and circled the National Mall in their unhitched rigs before holding a rally at the Capitol, where they demanded congressional action on fuel prices.
This story appears in the May 5 print edition of Transport Topics.
U.S. retail diesel prices set a record for the third consecutive week as the national average rose 3.4 cents a gallon to $4.177, according to data from the Department of Energy.
At the same time, gasoline rose 9.5 cents to $3,603 a gallon, marking the fifth consecutive record for that fuel. The price reports are from DOE’s April 28 weekly survey of filling stations.
While crude oil dipped nearly $5 a barrel last week from its all-time record to about $114 a barrel on the New York Mercantile Exchange, it remained more than $50 a barrel more expensive than the corresponding time last year.
The latest increase in diesel left commercial trucking’s main fuel $1.366 above the corresponding week of 2007. At an estimated burn rate of 730 million gallons a week, trucking companies paid just under $1 billion more for their fuel last week than in the corresponding week of 2007.
“Diesel supplies are still the issue right now” that is pushing prices upward, said Phil Flynn, an energy analyst with Alaron Trading Corp. in Chicago.
DOE figures also show the diesel average has gained more through the first four months of this year than it did in all of 2007. Between Jan. 1 and April 28, the average price of diesel fuel rose 80.1 cents a gallon. During 2007, the diesel average increased 76.5 cents.
“World distillate markets . . . have been unusually tight this year, placing extra pressure on U.S. diesel and heating oil prices over and above the high price of crude oil,” DOE’s Energy Information Administration said in its weekly release.
Flynn, the Alaron analyst, said harsh winter weather in the United States and Europe siphoned off distillate stocks to meet demand for heating oil, further pressuring diesel prices that already were inflated because of historic crude oil costs. “It seems that refiners are more worried about building diesel supply than gasoline.”
DOE said distillate stocks were 105.8 million barrels of as April 25, well below the 117.1 million barrels reported a year ago. Similarly, crude oil stockpiles were 319.9 million barrels compared with 335.6 million barrels in 2007.
At the same time, the average gasoline price is up 63.2 cents year-over-year after five consecutive increases that have pushed the average up 34.4 cents since the end of March, DOE said.
At those prices, the trucking industry, which consumes about 290 million gallons of gas a week, spent about $180 million more for gasoline last week than it did a year ago.
With the cost of diesel rising rapidly to unprecedented levels, fully recovering costs with a surcharge has become almost impossible, one carrier said.
Jack Waldock, president of Ohio Eastern Express in Sandusky, Ohio, said that over the past decade his company’s monthly fuel bill has ballooned to about $240,000 from about $56,000.
The carrier’s current fuel surcharges, which range from 57 cents a mile to 85 cents a mile cover “roughly half of that,” Waldock said.
“Fuel surcharges are roughly 26 cents a mile short of the mark,” partially because “there’s going to be at least 75 miles of deadhead” associated with every load, Waldock said.
He said his trucks “will not deadhead more than 100 miles for a load.” With an average length of haul of 525 miles, that means Ohio Eastern must rely on less-profitable brokered freight for backhauls, he said.
“Ten years ago, you didn’t think twice about bringing 10 [empty] trucks back to Ohio from the East Coast to pick up a load,” said Waldock.
Several more publicly traded motor carriers said the drastic increase in fuel prices had hurt their most recent quarterly earnings.
“Record diesel fuel prices, which soared late in the quarter, adversely affected earnings-per-share by 10 cents, compared with the prior year’s quarter,” Steve Russell, chief executive officer of truckload carrier Celadon Group, said in the company’s fiscal third-quarter earnings report.
Likewise, truckload carrier Heartland Express said its fuel costs in the first quarter soared 41.6% above year-ago levels and drove per-share earnings down by about 3 cents a share.
Heartland, Coralville, Iowa, and Celadon, Indianapolis, rank No. 45 and No. 56, respectively, on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.
The high fuel prices again sparked public protests by some truck drivers last week, The Associated Press reported.
On April 28, a group of truckers descended on Washington, D.C., and circled the National Mall in their unhitched rigs before holding a rally at the Capitol, where they demanded congressional action on fuel prices.
