Big Issues
COVID lockdowns in China are creating a much larger risk for global freight movement. China currently has more than 180 million people under partial or full lockdowns stretching across 27 cities. This is affecting regions that contribute more than 50% to China’s total output. The timing on reopening will determine what impact it will have on the US supply chain. There will be waves of container ships that eventually get released and head for the US at a critical time this summer, potentially creating more congestion and overwhelming US distribution systems.
Fuel
The National Average diesel price is currently at new all-time highs at $5.51 a gallon ($5.18 in last month’s update); which is higher by $2.37 a gallon year-over-year (up $2.02 last month). Fuel surcharge rates were up 63.6% Y/Y through April (up 62.0% in the last update) according to the latest DAT Trendlines report.
Crude oil prices were mixed at the time of this briefing, but they remain historically elevated. West Texas Intermediate is currently trading at $103.37 a barrel ($103.72 in the last update). Brent North Sea Crude is $105.90 a barrel ($108.07 in the last update). Crude oil accounts for 49% of the price of a gallon of diesel and has a heavy influence on fuel prices.
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