Diesel prices surge past $3.40/gallon

Record high prices make it more difficult for carriers, material suppliers to recoup fuel costs

By Staff -- Purchasing, 12/4/2007 6:22:00 AM

Diesel prices in the U.S. spiked in November to more than $3.40 on average and hit a record high of $3.44/gallon nationally last week before dipping 2.8¢ this week.

Since January, diesel prices nationally have increased by 38%, according to the U.S. Energy Information Administration.

Newsday reports that the higher diesel prices will push up fuel surcharges from the major logistics providers, although in some cases the providers’ surcharge charts don’t cover diesel prices at $3.40/gallon. And some logistics sectors are seeing declining demand, making it harder to negotiate fuel surcharges. The American Trucking Associations reported that its truck tonnage index declined slightly in October and that year-to-date, the tonnage index was 2.2% lower than during the same period in 2006, indicating a lower demand for trucking services in the U.S. this year.

And the Wall Street Journal reports that manufacturers and retailers are having more difficulty passing along those higher fuel surcharges to their customers due to continued concern about slumping demand for materials and products. The Journal says the result is that “Diesel prices are expected to add another threat to corporate profits amid a weak housing market and declining consumer confidence.”