Diesel Prices Continue to Surge

Higher gas prices mean more strain on your supply chain’s essential parts, but many supply chain professionals have been aware of the impact diesel prices can have, and have been taking steps for higher prices long before those prices began to crawl upwards. As this article by Jeff Berman (and hosted on scmr.com) explains, the department of energy recently indicated the following: According to data released this week by the Department of Energy’s Energy Information Administration (EIA), diesel jumped up 5.3 cents to $4.157 per gallon, marking the fifth straight weekly gain. What’s more, prices have gone up a cumulative 23 cents during that period and 17.7 cents in the past three weeks alone. This week’s price is the high point for diesel since checking in at $4.207 per gallon the week of August 18, 2008, and it tops the previous recent high of $4.116 from the week of October 22. Fuel price fluctuation has been a consideration for supply chains for decades now, but with the expansion of a global market and China’s increasing demands for oil, the fluctuation can mean more than just low “stocks” of oil. The considerations are endless, including regional upheaval, OPEC strategy, and poor pipeline infrastructure (as is the case in the US). Regardless of the cause, supply chains must consider ways to ship and deliver goods more efficiently and intelligently if they hope to manage what one can only expect to be continually rising prices on oil. As the article explains, “optimizing logistics networks and distribution/replenishment strategies that will minimize transportation…” is perhaps the best bet in managing the fluctuation of oil prices: if supply chains can use less, and use it more effectively, a jump in price will not spell out supply chain halts.

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