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Diesel Down 3.7¢ to $2.976 a Gallon in 13th Straight Decline

The U.S. average retail price of diesel dropped 3.7 cents to $2.976 a gallon, the U.S. Energy Information Administration reported Jan. 14, even as crude oil prices climbed above $50 per barrel.

The drop in diesel marked the 13th consecutive weekly decline in the cost of trucking’s main fuel. The price has fallen 41.8 cents during that period. The last time diesel fell below the $3 threshold was March 19, when it was $2.972.

Diesel costs 5.2 cents a gallon more than it did a year ago, when the price was $2.924, EIA reported.

Average diesel prices fell in all regions of the country, led by the California region, where per-gallon costs dropped 6.3 cents to $3.742.

The smallest drop was 0.8 cent a gallon, in New England, to $3.208.

The average price of gasoline rose 1 cent to $2.247.

US maritime taking a hit as shutdown drags on

With no end in sight to the partial government shutdown, there’s growing concern that the ability to move water-borne freight could shift into crisis mode the longer the shutdown continues.

That’s because much of the work that gets done behind the scenes in the US maritime industry is done by civilian employees – most of whom are furloughed. Also, while much of the regulatory and enforcement responsibilities fall on the shoulders of active duty U.S. Coast Guard personnel, they’re the only branch of the military that is being required to work without getting paid.

An estimated 31% of the branch’s 41,000 active duty members don’t have enough money in an emergency savings fund to cover one month’s worth of expenses, according to Congressman Peter DeFazio of Oregon, Chairman of the House Transportation & Infrastructure Committee, who introduced a bill this week that would provide funding to ensure they are paid during the shutdown.

“We are asking them to do their job serving and protecting our communities, which sometimes means life or death situations, without pay,” said DeFazio’s colleague, Congressman Kurt Schrader, in a statement. “Meanwhile Congress can’t do its number one job. What kind of message is that?”

Race for Next-Generation Battery Supremacy Has an Early Leader

To deliver an electric vehicle that’s cheaper, safer and capable of traveling 500 miles on a single charge, the auto industry needs a breakthrough in battery technology. Easier said than done.

Scientists in Japan, China and the United States are among those struggling to crack the code of how to significantly boost the amount of energy a battery cell can store and bring an EV’s driving range into line with a full tank of gas. That quest has zeroed in on solid-state technology, an overhaul of a battery’s internal architecture to use solid materials instead of flammable liquids to enable charging and discharging. The technology promises major improvements on existing lithium-ion packs, which automakers say are hitting the limits of their storage capabilities and may never hold enough power for long-distance models.

If it can be mastered, solid-state technology could help speed the demise of the combustion-engine car and potentially slash EV charging times to about 10 minutes from as much as several hours. The supercharger network built by Tesla Inc., now offering some of the fastest charge times, needs approximately 30 minutes to bring a depleted car to 80%.

“We don’t see another way to get there without solid-state technology,” said Ted Miller, Detroit-based senior manager of energy storage strategy and research at Ford Motor Co., which has studied various technologies aimed at delivering a more powerful EV battery. “What I can’t predict right now is who is going to commercialize it.”

Trucking Industry Expected to See Slower Growth in 2019

After a 2018 that saw record-setting levels of freight-hauling demand and driver pay as tonnage levels reached a 20-year high, the trucking industry is expected to remain strong in 2019 but undergo a bit of a cool-down, economists say.

“[Last year,] of course, was as good a year as the truck market has ever had — it was a record year in a number of ways,” Transport Futures Principal and Economist Noel Perry said during an interview on Transport Topics Radio, which is heard on SiriusXM Radio. “The spot market started the year at extraordinarily tight levels, and the contract market has been tight all year. So, it was a great year.”

He noted, however, that things trailed off as the year closed. “The fourth quarter was down enough in several categories to indicate we’re not going to sustain that peak performance in 2019.”

For the economy and the trucking industry, 2018 was spectacular. The U.S. Gross Domestic Product expanded at a 3.5% rate in the third quarter, and the December jobs report from the Bureau of Labor Statistics showed the economy added a robust 312,000 positions.

American Trucking Associations reported that, through November, the total freight hauled by for-hire truck drivers was 7.2% more than the first 11 months of 2017.

Diesel Average Drops 3.5¢ to $3.013 a Gallon

The U.S. average retail price of diesel dropped 3.5 cents to $3.013 a gallon, the U.S. Energy Information Administration reported Jan. 7, even as crude oil prices saw some renewed vigor and approached $50 per barrel.

The drop in diesel marked the 12th consecutive weekly decline in the cost of trucking’s main fuel. The price has fallen 38.1 cents during that period.

Diesel costs 1.7 cents a gallon more than it did a year ago, when the price was $2.996, EIA reported.

Average diesel prices fell in all regions of the country, led by the Rocky Mountain region, where per-gallon costs dropped 4.5 cents to $3.026.

The smallest drop was 1.8 cents a gallon, in New England, to $3.216.

Snowstorm could lead to treacherous driving conditions in the Midwest this weekend

Forecasters predict that heavy snow could cause travel troubles in several midwestern states this weekend.

A developing snowstorm is expected to hit the midwest starting on Friday, January 11, bringing with it several inches of snow and causing possible travel disruptions.

Weather forecasters at Accuweather predict that the snowstorm will be severe enough to cause travel difficulties in southern and central Missouri as well as portions of Kentucky, Illinois, Indiana, Ohio, and Tennessee starting Friday night and into Saturday.

Amid an Export Boom, the US Is Still Importing Natural Gas

The U.S. may be exporting natural gas at a record clip, but that hasn’t stopped it from accepting new imports. A tanker with fuel from Nigeria is sitting near the Cove Point import terminal in Maryland, while a second ship with Russian gas is idling outside Boston Harbor.

Pipeline constraints, depleted stockpiles and a 98-year-old law barring foreign ships from moving goods between U.S. ports is opening the way for liquefied natural gas to be shipped from overseas with prices expected to spike as the East Coast winter sets in.

The two tankers are carrying about 6 billion cubic feet of LNG, enough to power 150,000 homes for a year. At one point Dec. 27, the ship carrying Nigerian fuel to Cove Point passed another tanker in the Chesapeake Bay filled with U.S. gas that was headed abroad.

“It is ironic,’” said John Kilduff, a partner at Again Capital LLC in New York. But the “super cheap gas” produced in the nation’s shale fields “is trapped down west of the Mississippi unable to serve its own market,” he said by phone. “The gas is where the people aren’t.”

China Is Said to Plan to Buy US Corn as Soon as January

Chinese officials are preparing to restart purchases of American corn as soon as January, another sign that the Asian nation is working on a lasting detente with the U.S.

China may buy at least 3 million metric tons of U.S. corn, according to people familiar with the discussions, who declined to be identified as the information is confidential. The imports are likely to start as early as January, following the American soybean purchases, they said.

The government is also considering various options for how to handle the 25% retaliatory tariffs on American corn that China adopted in July, the people said. Current ideas include:

Allowing the U.S. commodity to be purchased as part of a 7.2 million ton annual corn import quota that is only subject to a lower levy

Reimbursing the 25% tariff to buyers purchasing outside the quota

Waiting to purchase until after the 25% tariffs are removed

Amazon Air Announces Significant Expansion in Major Markets

The air transport division of online retailer Amazon is expanding its capacity at a regional airport near Chicago that markets itself as an alternative to the city’s O’Hare International Airport, the nation’s sixth busiest cargo facility.

Amazon Air on Dec. 10 announced it will more than double its presence at Chicago Rockford International Airport, boosting the number of daily cargo flights it operates out of a facility that sits about 90 miles from both Chicago and Milwaukee. In terms of truck access to the area, Interstates 39 and 90 run directly through Rockford, while two more, I-43 and I-88, are about 30 minutes away.

Airport officials have long felt the facility could serve more of the cargo and passenger volume in the growing Northern Illinois and Southern Wisconsin regions, and see the Amazon move as vindication.

“We have been wondering who would figure it out first, the cargo guys or the passenger guys, and clearly the cargo guys have figured it out,” said Mike Dunn, the airport’s executive director, in an interview with Transport Topics. “It has brought our airport to the attention of a lot of very important people throughout the world.”

Higher Motor Oil Prices Nudge Preventive Maintenance Costs Up

Preventive maintenance (PM) expenses were slightly higher in 2018 because of the increased cost of crude oil, but this was offset by improvements in engine design, onboard oil monitoring technology, and improved oil quality, allowing fleets to extend oil drain intervals. Oil drain intervals will continue to lengthen as older vehicles are retired from fleet service.

While there are regional differences in prices, when averaged out on a national basis, PM costs in 2018 have been relatively stable.

Putting upward pressure on PM costs is the maintenance policies of some OEMs adopting more stringent motor oil requirements for new models. As a result, total oil costs have increased slightly, year-over-year, as more vehicles are utilizing synthetic oils, which are higher in cost than mineral-based oils. The increased cost of using a synthetic oil is balanced out by the decreased frequency of services, resulting in less downtime for oil services.

Also, contributing to the industry-wide trend of extended oil drain intervals is onboard oil life monitoring systems that are installed as standard equipment in some popular fleet models. Onboard oil monitoring system reflects actual driving patterns, which often allows for longer oil change intervals. More OEMs are using onboard oil life monitors to define PM frequency. From a PM compliance perspective, a defined PM interval is still required in order to properly measure compliance across a vehicle fleet. When using an onboard oil monitoring system, careful consideration to application, usage, terrain, PTO usage, and idle time should be given before a PM interval is defined.