Top Supply Chain and Logistics News From WSJ

Trucking companies have a new concern even as they cope with shifts in the freight market. The pump price for diesel fuel has risen to the highest level of the year, WSJ Logistics Report’s Jennifer Smith writes, while prices have soared more than 10% in futures markets in the weeks since OPEC countries agreed to cut production. For truckers, this may mark the end to two years of cheap fuel that has helped them weather weak demand, and it suggests shippers will make new calculations on transportation choices heading into 2017. Fuel is one of the trucking industry’s biggest expenses, with diesel making up anywhere from 30% to 40% of the average fleet’s spending, but prices have been low and holding at a remarkably steady level. Today’s prices are still roughly 50% lower than they were in 2008, and fuel last year accounted for 25% of overall expenses. Analysts say rising costs may hurt smaller carriers in the near term, however, since they have thinner margins and may not be able to pass the higher costs along to customers as quickly.

 

Full Article, http://www.wsj.com/articles/todays-top-supply-chain-and-logistics-news-from-wsj-1481629254 via @WSJ