January is starting the year at $2.92 cost per mile for the Rockfarm truckload index, an increase from December’s $2.89 and the highest since August of 2022, which also reported the same at $2.92 cost per mile. The average DOE cost per gallon for diesel fuel remains elevated over the past year. However, it has shown a decrease in cost since February of last year.
The importance of fuel being driven lower and the cost per mile increasing is twofold. The ﬁrst is that diesel fuel production is balancing out to the global demand showing a decline in the cost per diesel. Secondly, capacity through January has been tight with the true line haul rate per mile moving past the posted increase of $0.03 per mile from December’s average.
As we move toward mid-February the cost per mile is showing continued strength rolling in at $2.89. This month’s cost per mile is now crossing the threshold rate per mile seen in February 2021 when truckload rates rose beyond the $4.00 cost per mile we saw in 2022. Overall index rates across the Rockfarm truckload market indicators show rates settling under the threshold of July through December. With a slight uptick, we should see rates continue to hold in the $2.80 to $3.00 range in cost per mile for the near term.
In another key indicator, the U.S. Census Bureau is reporting the US Business Inventory/Sales Ratio increased to 1.36, up from the August through October ratio of 1.33. Retailers were not shy about building inventories as the 2022 holiday season began. In addition to the inventory/sales ratio, the Kansas City Fed Manufacturing Backlog of Orders Index is showing another decrease in back orders for January, albeit slight, in comparing to December.
In other news, it is being reported that monthly import containers fell to less than 2 million TEUs in December. The Port of L.A. Operations Report is showing 8 container ships in port with only 1 additional container ship within 40 nautical miles. Currently, the San Pedro Bay port complex is reporting 13 container vessels destined for the Port of L.A. and Long Beach within 150 nautical miles, and an additional 28 vessels inbound from the origin port to 150 nautical miles of the San Pedro Bay.
For more information please reach out to our Supply Chain Coach team.
Brad’s journey into logistics began as a Marine Officer and transitioned from the LTL docks to the non-asset side within the logistics service provider arena. As a co-founder of Rockfarm, Brad drives our business development efforts and delivery of our promise. An Arizona native, Brad enjoys spending time outdoors in his home state with his wife and family.
“Our approach to the market allowed us an opportunity to push forward in 2008 and enable our mission, lower the cost to serve to stand as a cornerstone to our company today.”