Diesel prices drop another 4 cents, time to re-tender?



Many of our customers are now Tendering their freight needs for Q3 Q4 2016. And we are seeing a very interesting situation, where our shippers can now in a matter of weeks, renegotiate all their freight agreements and reduce their costs exponentially due to the agility of the system and the fuel cost reduction, both in ocean and road transport.

If we talk about the scenario in the states, where the average price per gallon for diesel  fell for the 12th straight week, with a 4 cent decline to $2.031. Over the last 12 weeks  diesel prices have dropped a cumulative 46.1 cents. And the current average price per gallon is now at its lowest level since the week of March 16, 2009, when it was at $2.017 per gallon. The previous lowest comparison week prior to this week’s decline was the week of March 23, 2009, when it was at $2.09.

Compared to the same week a year ago, the average price per gallon is down 80 cents.
Because of the volatile nature of fuel prices, shippers are accustomed to tough negotiations with carriers on fuel surcharges. Now that diesel prices have fallen, shippers say more will be expected of them to keep those savings for their companies and using a online Tendering system to manage these negotiations with features like TenderEasy colour coded feedback, is essential to achieve this savings.

Shippers say that the current ongoing decrease in diesel costs is beneficial from a financial perspective, and after several years of high fuel costs, many shippers began tracking diesel much more closely with TenderEasy, creating specifics scenarios analysing the impact of the fuel cost, and how its performance would affect them. Well now they are in the green side.

Various reports maintain that with oil production levels remaining high, it is unlikely the decline in prices will abate soon. The Wall Street Journal recently reported earlier today that oil prices have dropped about 18 percent since the beginning of 2016, with analysts saying prices are likely to stay volatile, which creates the need of Managing freight rates very quick on a changing world, which can easily be performed with TenderEasy Rate management system.

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