Diesel Prices: Up, Down, or Stuck?

A Dallas County judge affirmed 100% of the roughly $603 million verdict against C.H. Robinson in the Lippe v. Lupus Superior case and added approximately $100 million in accrued interest, bringing the total judgment to around $700 million, according to FreightWaves editor-at-large John Kingston. The case stemmed from a fatal accident in which a Lupus Superior driver hauling a beverage load brokered by C.H. Robinson was killed along with two other people. The jury found C.H. Robinson liable, and the judge’s ruling treated the driver as effectively an employee of the broker, Kingston said. Kingston said the total judgment was growing daily at a rate above 6%.

C.H. Robinson faced a choice to settle and absorb a payout or pursue appeals while interest compounded, Kingston said. He noted the company held roughly $150 million in cash and carried an investment-grade credit rating it was unlikely to put at risk. The broker had already announced plans to raise new debt to fund its pending acquisition of RXO, a deal announced roughly two to three weeks earlier, according to Kingston. The company reports earnings on October 28, with a conference call at 5 p.m., and Kingston said that call will be the most closely watched of the season.

The Department of Energy’s weekly benchmark rose 9.7 cents this week to $6.276 per gallon, reversing three consecutive weeks of declines, according to Kingston. The record high of roughly $6.52 was set about three weeks earlier. Kingston described the current price environment as “stuck,” with Brent crude above $100 but well short of the $150 worst-case scenarios floated earlier this year. He said low distillate inventories and approaching winter heating-oil demand left little room for prices to fall, and he saw a case for an increase going into winter; he added that a mild El Niño winter in the Northeast, the largest U.S. heating oil market, could limit some upside pressure on distillate supplies.

The American Transportation Research Institute’s annual survey ranked fuel prices as the No. 1 concern overall and the top issue for drivers in 2023, according to Kingston. ATRI had conducted the survey for 22 years, and Kingston noted fuel prices either did not appear on the list or landed at No. 1, with no middle ground. Truck parking ranked No. 2 among drivers but did not appear on carriers’ list at all, illustrating a persistent disconnect between the two groups. For sourcing professionals, the DOE benchmark’s role as the basis for most fuel surcharges makes its weekly moves a direct input into transport cost indexing.