|  | |  | In today’s email:Three Freight Headlines: A shipment of ammonium nitrate has disappeared, peak shipping season faces uncertainty due to economic factors, and Landstar System lowers Q2 guidance amid reduced demand. Diesel Prices Around the World: How Does the US Compare? Around the Freight Web: Intermodal demand remains sluggish, US consumer health is deteriorating due to inflation, Apple initiates a large 5G project with Broadcom, the House approves funds for truck parking expansion, plus more.
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Exciting news: Until the end of Q2, receive a 20% discount on all new contracts with Greenscreens.ai. Don't miss out on this chance to elevate your freight brokerage. Click here to take advantage of this limited-time offer! | | 🐔 WHAT’S COOKIN’ IN FREIGHT | Three Headlines |  | ⚠️ Nitrate Shipment Vanishes. A 30-ton shipment of ammonium nitrate, a chemical utilized for both fertilizers and explosives, has reportedly vanished en route from Wyoming to California. The railcar was found empty upon arrival at a Mojave Desert stop, despite seals remaining intact. Transporting company, Union Pacific, and supplier, Dyno Nobel, believe the pellets may have fallen from the car due to a possible leak, posing no public health or environmental risks. Various authorities are investigating potential regulatory violations and measures to prevent future incidents.
📦 Shipping Season Uncertainty. Despite optimism that inventory destocking and new merchandise shipments could boost the peak shipping season, SEKO Logistics warns of a lackluster period due to retailers' caution amid economic uncertainties, such as inflation and a potential recession. On the other hand, big retailers like Walmart and Target signal they are nearly done paring back their excess inventories, and preparing for restocking, indicating some potential for freight carriers. While freight carriers hope for a shipping rebound, the overall peak shipping season remains uncertain due to various market factors and consumer behavior.
📉 Landstar Lowers Guidance. Truck broker Landstar System has reduced its second-quarter guidance due to lower-than-expected seasonal uplift in May. The Florida-based firm anticipates revenue to fall within $1.325 billion to $1.375 billion, marking a 5.3% decrease from previous forecasts. Truck loads and revenue per load have both decreased more than expected, and earnings per share are now estimated at $1.75 to $1.85, down 8% at the midpoint. With spot rates still declining, the industry awaits a potential surge in demand or reduction in carrier operating authorities. | | | Nearshoring Your Logistics Operation to Mexico |  | Rapido Solutions Group is a top nearshore staffing company providing logistics and supply chain talent to companies in the United States. Based in Guadalajara, Mexico, Rapido offers a unique combination of cost savings and access to a skilled workforce, making it an attractive option for American logistics businesses.
Read the full article to see what makes nearshoring to Mexico an attractive option for scaling a logistics company and how partnering with Rapido Solutions Group simplifies the whole process. | | | Diesel Prices Around the World: How Does the US Compare? |  | High Diesel Prices: A Global Economic Ripple Effect
Fuel costs, particularly diesel, play a pivotal role in shaping the global economy. This is especially evident in the logistics sector, where escalating diesel prices directly affect the operating costs of trucking companies. This article explores the multifaceted economic implications of high diesel prices and how they influence national economies around the globe.
Last year, the Russian invasion of Ukraine led to significant geopolitical turmoil. In response, Western countries imposed heavy sanctions on Russia, triggering a noticeable surge in gasoline and diesel prices. This sudden price hike boosted profits for oil refineries, while trucking companies bore the brunt of skyrocketing fleet operating costs.
The Ties Between Oil Demand, Economic Prosperity, and Fuel Prices
In an ironic twist, a thriving economy inadvertently drives up diesel and gasoline prices since oil is essential in producing almost all products we consume daily. A robust economy boosts the demand for oil, thus pushing prices higher. This was clearly observed prior to the 2008 recession when diesel and gasoline prices reached all-time highs.
However, we must remember that correlation does not necessarily equate to causation. Each situation is uniquely influenced by a multitude of factors. In our current scenario, the sanctions on Russia (the world's third-largest oil producer) and an unexpected announcement of production cuts by the Organization of the Petroleum Exporting Countries (OPEC), significantly contributed to the surge in diesel prices. OPEC, an international consortium mainly consisting of Middle Eastern countries, controls a large portion of the world's oil production. |  | The Heavy Toll of High Diesel Prices on the Trucking Industry
Let's delve deeper into the economic implications using a semi-truck as an example. If it averages 5 MPG (although they typically average around 6.5 MPG) and the cost of diesel is $5 a gallon (as it currently is in California), the trucking company or operator incurs a cost of $1 per mile solely for fuel. When we factor in additional expenses like insurance, driver pay, and repairs, the overhead becomes increasingly burdensome, particularly in a bear freight market.
Diesel Prices: A Short Respite Followed by a Potential Surge?
Currently, the U.S. is experiencing a decrease in diesel prices, with the average price now at $3.72 per gallon. However, this relief may be fleeting, as diesel inventories have diminished to last fall's levels, signaling a potential future surge in prices.
A Comparative Look at Diesel Prices Across the Globe
Expanding our discussion to an international level, the U.S. ranks 4th for the cheapest price of diesel per gallon among 20 large, developed economies. The only countries with cheaper diesel are the UAE ($3.17), Russia ($2.79), and Saudi Arabia ($0.76). Despite the recent price hike, we can take solace in the fact that we are not facing the high prices observed in EU countries, which would significantly escalate inflation and economic challenges.
Here are the 10 states with the cheapest price per gallon of diesel in the US:
Texas: $3.410 Louisiana: $3.583 Oklahoma: $3.581 Mississippi: $3.612 Missouri: $3.637 South Carolina: $3.694 Kansas: $3.703 Tennessee: $3.701 Alabama: $3.746 Nebraska: $3.725
Here are the 10 states with the most expensive price per gallon of diesel in the US: District of Columbia: $4.390 Maine: $4.374 Oregon: $4.463 Pennsylvania: $4.447 Nevada: $4.480 Arizona: $4.549 New York: $4.599 Washington: $4.944 California: $5.133 Hawaii: $5.790
If you enjoyed this read or found it informative, share it with a friend. | | |  | 💊 Truck Driver Driving on Fentanyl: This may be the craziest email we have seen. Unbelievable and deeply troubling. Safety in the trucking industry is non-negotiable. We hope both individuals are safe and get the necessary treatment urgently.
🚅 Intermodal Demand Stalls: Despite a slight decrease in retailer inventories, intermodal transportation providers J.B. Hunt and Schneider National reported sluggish demand and an unclear outlook for the latter half of 2023.
📉 Consumer Health Declining: Despite nominal incomes rising, real wage gains are impacted by inflation and the increased spending paired with diminishing savings buffers, indicating a deterioration in the US consumer health, according to a recent statement by the COO of JPMorgan Chase.
🍏 Apple’s New Venture: Apple unveils a multi-billion dollar agreement with Broadcom to develop 5G radio frequency components in the US. The deal, set to create jobs and boost US economy, aligns with Apple's pledge to invest $430 billion in the country's economy over five years.
💰Truck Parking Boost: The U.S. House Transportation and Infrastructure Committee has approved a $755 million investment over three years to expand truck parking.
🚛 FreightWorks Faces WARN Lawsuit: FreightWorks faces a lawsuit from ex-employees claiming the trucking firm violated the WARN Act by not giving 60-day layoff notice.
🚢 OOCL Refutes BBBY: OOCL has contested Bed Bath & Beyond's (BBBY) $31.7 million compensation claim, blaming BBBY's supply chain mismanagement during the crisis. | | |  | | | | | |
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