Bad news for cost relief: Fuel prices projected to remain above $5/gal into 2023

Trucking news and briefs for Friday, Nov. 11, 2022:

Diesel prices projected to remain above $5/gal into 2023

The Department of Energy’s Energy Information Administration in its monthly Short-Term Energy Outlook released this week revised its outlook for retail diesel prices for the fourth quarter of 2022 and the beginning of 2023.

EIA said it expects national diesel prices to average more than $5 per gallon for the rest of 2022. EIA’s national average for a gallon of on-highway diesel was $5.33 during the most recent week ending Nov. 7.

The administration said it does expect a slight contraction of the U.S. economy to bring distillate prices down in the first half of 2023, however.

EIA also upwardly adjusted its full-year diesel average projects for 2022 and 2023. The administration now projects 2022 will close with the annual average having been $5.09 – a 2.5% increase from its October projection of $4.97. For 2023, EIA adjusted its projection by 8.4%, increasing it from $4.29 per gallon to $4.65 per gallon.

Based on current conditions, EIA projects diesel to average $5.12 per gallon in the first quarter of 2023, $4.69 in the second quarter, $4.38 in the third quarter and $4.45 in the fourth quarter.

So much for owner-operator hopes of pricing relief, a shock made worse for independents who rely on spot market freight in recent times, as rates haven't kept up with fuel costs. 

DAT reported last week's national average van load-to-truck ratio as 2.7. The number of reefer load posts jumped more than 13% last week, following a typical seasonal pattern ahead of the Thanksgiving holiday. Truck posts fell 3.5% and the national average reefer load-to-truck climbed from 4.2 to 4.9.

The number of flatbed loads on the DAT One network decreased by 3.5% compared to the week prior and is now down 24% from the previous month, illustrated by continuing rates declines for spot-market flatbed loads. The number of flatbed equipment posts rose by about 2%. The flatbed load-to-truck ratio was 10.8 as a national average, down from 11.4 the previous week.

A market to watch: Houston vans headed west | Last week there was a 14% increase in the number of outbound van loads from the Houston market compared to the previous week. Among the destinations most in demand were Los Angeles, Phoenix, and Ontario, California. This year Port Houston has experienced an influx of freight diverted from the ports of Los Angeles and Long Beach, which has led to longer container dwell times and congestion. Port Houston announced plans to charge $45 a day for each container that exceeds seven days of dwell time, and even higher fees when dwell time becomes excessive.

There’s a strong need to move loads and equipment out of the port on top of whatever other freight is moving out of Houston warehouses and distribution centers in advance of the holidays.

Key lanes there:

• Houston to Los Angeles averaged $1.85/mile last week, which is about 30 cents higher than the same time last year. Subtracting fuel, the line-haul rates are identical year over year at a paltry $1.17. Rates are similar from Houston to Ontario.
• Houston to Phoenix looks better, as it paid $2.22/mile last week on average, almost 10 cents better than the October average and 36 cents more year over year. Capacity in Phoenix is loose, though -- look for a load out before you commit to a load in.

TA opens 2023 Citizen Driver nominations

TravelCenters of America has opened the nomination period for its 2023 TA Citizen Driver Contest.

Each year, TA hosts the contest as an initiative to give back to the trucking community. It recognizes over-the-road truck drivers who evoke public respect for the truck driving profession.

Families, friends and coworkers can nominate a truck driver who exemplifies a strong work ethic and character through the online nomination form through Dec. 31.

A judging period will be held following the entry period, and the winners will be announced March 31 at the Mid-America Trucking Show in Louisville, Kentucky.

Doug Smith and Susie Deridder were recently announced as winners of the 2022 TA Citizen Driver contest. Each Citizen Driver annually gets to choose a TA, Petro or TA Express location to be dedicated in their honor.

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