Transport Topics News Alert Monday, Dec. 19, 2011 -- 5:15 p.m. ET
Diesel Falls 6.6¢ to $3.828 in Largest Drop Since May 2010; Gas Drops 5.7¢ to $3.229
Diesel’s national average pump price dropped 6.6 cents to $3.828 a gallon, its fourth straight weekly downturn and the biggest decline in more than a year and a half, the Department of Energy said Monday.
Presumably you are suggesting that this is a negative for TA, and it may be, but I am not sure. I have checked the spot prices and the future prices and I believe that TA's cost has gone down about as much over the last six weeks. Tough to call however. Perhaps as interesting is that the railroad loadings for the last week came out today. The intermodal (rail to truck) was up 6%. That is a great number, and although I don't have a lot of experience with this, I think it may be a fabulous growth number for this late in the year. So my guess is that the prices that TA receives could be down but the volume could be higher than expected.
Doun, it is confirmed by the management that TA fuel margin increases in a falling fuel price environment. This topic has discussed ad nausea here before. When spot fuel prices fall at the wholesale side the reflection in street price does not happen instantaneously. The gap in time is where retailers enjoy increased margin while waiting to see if the lower price is sustainable.