Create a free Overdrive account to continue reading

Diesel prices drop by a penny per gallon, spot rates continue to slide

Trucking news and briefs for Tuesday, May 17, 2022:

Diesel prices fall by a penny, rates continue slide

Diesel fuel prices across the United States leveled off during the week ending May 16 after two weeks of significant increases, according to the Department of Energy’s Energy Information Administration.

According to EIA, diesel’s national average dropped by 1 cent to $5.61 per gallon. The decrease was spurred by a 4-cent drop in prices in the Midwest, a 4.4-cent decrease in the Gulf Coast region and a nine-tenths of a cent decrease in the West Coast less California region.

All other regions saw increases during the week, with the most significant being seen in New England, where prices increased by 9.2 cents.

The nation's most expensive diesel can be found in California at $6.48 per gallon, followed by New England at $6.43 per gallon.

The cheapest fuel can be found in the Gulf Coast region at $5.30 per gallon, followed by the Midwest region at $5.34.

Prices in other regions, according to EIA, are:

  • Central Atlantic -- $6.36
  • Lower Atlantic -- $5.61
  • Rocky Mountain -- $5.47
  • West Coast less California -- $5.62

ProMiles’ numbers during the week ending May 16 saw fuel prices increase by 5.8 cents, bringing its national average to $5.49 per gallon.

According to ProMiles’ Fuel Surcharge Index, the most expensive diesel can be found in California at $6.42 per gallon, and the cheapest can be found in the Gulf Coast region at $5.27 per gallon. 

Meanwhile, spot market rates continued to slide. 

With load posts on DAT boards down last week and truck posts up slightly, the company said to expect further possible rates softening. At once, with Roadcheck ongoing as we speak, capacity could tighten sufficiently this week to hold prices in check. 

A bright spot in the contract market saw contract rates holding better ground during the full month of April. National average van rate fell 28 cents to $2.77 per mile all-in, the lowest monthly average since August 2021. For reefers, rates were down further, 32 cents, to $3.13 per mile, and the flatbed rate held firm, unchanged at $3.40 per mile, a record high.

[Related: Chances of freight recession 'considerable,' according to Cass Freight Index]

Used truck sales dropped off in April

Preliminary used Class 8 volumes (same dealer sales) in April fell 40% month-over-month and were 33% lower compared to April of 2021, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research.

ACT’s preliminary report also showed that the average retail price rose 10% month-over-month, as average miles and age were both lower, down 5% and 6%, respectively, from March. Compared to April of 2021, the average retail price was 77% higher, with average miles and age by 3% and 7% higher, respectively.

“In the inventory-challenged world used truck buyers and sellers find themselves these days, it should come as no surprise that sales volumes fell in April,” said Steve Tam, Vice President at ACT Research. “March’s gains (+53%) came on the heels of the strong December new truck sales market (+49%). Looking back at January new truck sales (-39%), is it any wonder that April preliminary used truck sales were off a corresponding percentage (-40%)?”

Tam added that the preliminary average retail sales price for used Class 8 trucks “eked out another record in April.”

“Looking ahead, if April is not the peak for prices, then the zenith cannot be far off,” he said. “Slowing freight and freight rates confirm the assertion.”

[Related: Sellers' market: Owner-operator attempt to adapt to skyrocketing used-truck prices]

Yokohama increasing tire prices

Yokohama Tire Corporation announced this week it will implement a price increase on its commercial truck tires and consumer replacement tires sold in the U.S., effective July 1.

The increase is in response to “the unparalleled rise in costs associated with materials and operations,” the company said.

The Business Manual for Owner-Operators
Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the 2022 edition of Partners in Business.
Download
Partners in Business Issue Cover