4 January - 10 January

XB Manifest Weekly

Manifest Weekly: January 4-10, 2022

This week, we’re covering Bob Biesterfeld’s surprise termination from C.H. Robinson, how FedEx navigated contractor disputes and declining demand in 2022, and the rise in the average retail diesel price after 7 weeks of declines.

IN THE NEWS

Freight Broker C.H. Robinson Terminated CEO Bob Biesterfeld Amid Falling Demand, Growing Competition

As COVID-19 hit the world in 2020, the global shipping and logistics industries underwent massive disruptions and changes. With lockdowns forcing people indoors throughout 2020 and continuing in 2021, demand increased and logistics players, shippers, and freight brokers, among others, experienced increased revenues. But this trend shifted in 2022, as inflationary pressures and the Russia-Ukraine conflict influenced consumer behavior. Demand declined in the last few months of 2022. 

As we start 2023, demand seems to have slipped further. So much so that Bob Biesterfeld was fired as chief executive of C.H. Robinson Worldwide Inc., sending America’s largest freight broker by revenue into a search for new leadership amid falling freight demand and growing competition from digital upstarts.

TOP HITS THIS WEEK

From The Manifest

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WHAT’S HAPPENING AROUND THE WORLD

Highlights

ON OUR RADAR

Average Retail Diesel Price Rises After Weeks of Declines

The benchmark Department of Energy/Energy Information Administration average retail diesel price moved up on Tuesday last after seven weeks of declines. Retail prices finally reacted to higher futures and wholesale prices that have marked the diesel market since before Christmas. But just as that pump price has started to rise, diesel futures Tuesday posted one of the biggest declines since July, depending on how it is measured.

The weekly DOE/EIA price used as the basis for most fuel surcharges rose 4.6 cents per gallon to $4.583. The seven-week slide had taken down the benchmark from $5.333 per gallon on Nov. 7 to last week’s price of $4.537 before the recent turnaround.  

The upward tick follows an increase in the ultra-low sulfur diesel (ULSD) settlement price on the CME commodity exchange of more than 57 cents per gallon between Dec. 7 and the final trading day of the year Friday, when the CME ULSD settled at $3.3622. That upward move followed a decline that had seen the futures price fall to $2.787 per gallon on Dec. 7, pushed lower by several factors but none more significant than the rise in U.S. inventories from the low levels of the fall that threatened a severe diesel squeeze if they hadn’t reversed.  

Forecasts of warmer-than-normal weather in both the US and Europe in the coming weeks sent both diesel and natural gas sliding. The Henry Hub natural gas price, the US benchmark, settled below $4 per thousand cubic feet (Mcf) Tuesday, the first time it broke below that number since Jan. 21, 2022. It fell 48.7 cents per Mcf, a drop of 10.88% and a decline of a magnitude that provides a strong headwind for diesel markets to overcome.

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