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Diesel Prices Opinion * USA - Industry experts comment on impact of high oil prices on logistics
Even though oil and gas prices have subsided somewhat in recent weeks, current price levels are impacting the playing field for shippers and carriers in ways which may have a lasting affect...
Washington,DC,USA -Logistics Management, by Jeff Berman -22 Aug 2008: -- ... According to two prominent transportation and economic experts. Jeff Rubin, chief economist of CIBC World Markets, and Bob Costello, chief economist and vice president of the American Trucking Associations, shared their views on how fuel prices are impacting world trade and domestic freight conditions in a conference call hosted by the National Association for Business Economics (NABE) yesterday, entitled “Oil Prices and the Cost of Logistics”... CIBC’s Rubin focused on how energy prices have impacted transportation costs and the broader ramifications of those increases are on transportation costs, in terms of global trade and global supply and what the inflationary ramifications may be if shippers move to more localized, regional trading, which is said is “where triple digit oil prices will likely lead us”... The domestic impact: The ATA’s Costello began his presentation by explaining that 69 percent of US tonnage moves by truck, according to the ATA’s “US Freight Transportation Forecast to…2018” which was released in January 2007... “Over the years, we have benefited from logistics as a total percentage of the US GDP coming down,” said Costello. “But we recently have seen it start to go up for a few different reasons”... One reason it has gone up he explained is congestion, which has gotten worse. This has in turn forced companies to hold more inventory, and highway transportation expenses are also adding to overall costs, too, which are also being passed along to consumers and shippers. This percentage also continues to go up in tune with oil prices, according to Costello, due to the fact that oil accounts for a large chunk of shippers and carriers freight transportation budgets...
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