Diesel prices are continuing on a mostly downward trend, with the benchmark price used for most fuel surcharges falling to one of its lowest levels since military action against Iran commenced at the beginning of March.
The Department of Energy/Energy Information Administration average weekly retail diesel price was published Tuesday, effective Monday, at $5.21/gallon. It is the lowest price since the first two prices that were published just after the start of hostilities, $4.859/g on March 9 and $5.071/g a week later.
It’s the fifth straight week the price has fallen. During that time, the declines total 43 cts/g.
There is a growing disconnect between the DOE/EIA price and the daily AAA average retail diesel price. That number was posted Tuesday at $5.317/g.
The declines come as futures price continue to fall, for the most part, but where the voices who talk about “tank bottoms”–a withdrawal of global inventories so massive that it gets stocks down to the minimum level needed for the petroleum distribution system to operate–seem to be increasing against that backdrop of falling prices.
That view of a disconnect was summed up in a post on X by John Arnold, a legendary trader and a thought leader on trading issues.
The most recent EIA report on U.S. stocks, released Wednesday for the week ending May 29, showed total inventories of 1.573 billion barrels, the lowest in more than two years and the tenth straight week they had declined. Given their weekly publication, and the U.S. position as the world’s largest consumer, the data is closely watched as a sign of potential global trends.
Ultra low sulfur diesel on the CME commodity exchange posted a recent peak settlement of $3.8481/g on June 3. Its settlement Monday was $3.5999/g, and the market was trending lower Tuesday morning.
Consistent Currie
One of the loudest voices saying that the commodity markets are not adequately pricing in the movement toward “tank bottoms” is Jeffrey Currie. He is the former head of commodity research at Goldman Sachs who is now on his own. And his message has been consistent for several weeks: what matters are the molecules, not paper markets that increasingly are bearish.
In a recent online interview, Currie said paper markets are “entirely disconnected from the physical markets.” Global crude benchmark Brent is now below $90/barrel. But crude delivered in some parts of the world is north of $150/b and product prices like jet or diesel are more than $200/b.
“The supply shock is almost equal to the demand shock during COVID, and we know what that did to global supply chains,” Currie said. “So I think if you’re at $100/b (in the futures market), it’s mispriced what is coming in the physical market.”
Why not buy forward barrels?
But if oil is mispriced, why aren’t traders buying barrels to be delivered several months from now, when the price will presumably be higher? They are not doing that, and the proof of that is in the forward curve.
For example, Brent on CME settled Monday at $94.25 for July delivery. But for January delivery, six months out, Brent settled at $83.91/b.
That structure is called backwardation, with the front month the highest number in the price series. Backwardation develops during periods of tight inventories, as a market that is in perfect balance would see prices rise along the calendar, a structure known as contango.
That backwardation is one reason why companies are reluctant to buy the cheaper crude for later day, according to energy economist Philip Verleger.
In a recent commentary Verleger said it would be expected that some companies that sell oil to consumers would want to accumulate inventories now at lower prices for future delivery.
“These companies would probably want to hedge and, in some cases, would be required to do so by their banks,” Verleger said. “Unfortunately, hedging today locks in a large loss. For example, (a company) who bought diesel at the end of May and sought to sell forward to November would immediately incur a $9-per-barrel loss due to market backwardation. The loss this transaction would have incurred a year ago would have been perhaps $1 per barrel.”
As Verleger noted, “Few firms can afford to accept such losses on significant product volumes.”
Export ban concerns
There also is a market fear, Verleger said, that the U.S. might ban exports of crude and products if the now falling price of oil reverses itself. Should that happen, he said, “such an action would likely depress prices in the United States, possibly violently. Oil in tanks would suddenly be worth much less.”
Given that, according to Verleger, “the risk boosts the incentive to hold no oil. Every US firm in the oil business has every reason to minimize its inventory holdings today to protect against the uncertainties created by President Trump.”
More articles by John Kingston
Texas court nixes shipper liability in Home Depot/Werner case
Carrier Nussbaum sets driver pay increase; others popping up more quietly
Amazon scores big win at NLRB over whether it’s a joint employer with DSPs
The post Retail diesel continues to fall while some voices fear what’s ahead appeared first on FreightWaves.
Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week in Borderlands Mexico: Uber Freight sees earlier peak season, stronger Mexico demand; Mexico freight trucking sector outpaces broader economy in Q1; and 1.1M-square-foot logistics center planned in Phoenix area.
Uber Freight sees earlier peak season, stronger Mexico demand
Uber Freight says U.S.-Mexico freight markets are tightening faster than expected as strong produce exports, rising fuel costs and declining driver availability push cross-border transportation rates higher heading into the summer shipping season.
The findings were included in Uber Freight’s Q2 Market Update & Outlook report released Thursday, which concluded that several market pressures expected later in 2026 are already impacting freight networks across North America.
The report forecasts truckload spot rates will remain 20% to 25% above 2025 levels for the remainder of the year, while contract rates could rise 5% to 10%.
“Peak season appears to be arriving earlier and behaving differently than normal,” Uber Freight said, citing a combination of produce volumes, fuel costs and tightening capacity.
Mexico produce exports drive demand
One of the strongest themes in the report is the impact of Mexico’s agricultural exports on cross-border freight markets.
Uber Freight said produce volumes moving through Laredo are experiencing one of the heaviest seasons on record. March shipments of citrus, fruits and nuts from Mexico were up more than 36% compared to the same period in 2025, while total exports moving through Laredo increased 8% year over year.
The surge in agricultural freight has helped pull trucking capacity toward key cross-border corridors and produce-growing regions.
According to the report, carriers have increasingly shifted equipment to take advantage of stronger reefer rates, creating capacity shortages for dry van shippers and contributing to broader market tightening.
Uber Freight noted that Fresno-to-Chicago reefer spot rates jumped 43% in a single month, while produce transportation rates from California to Chicago increased nearly 25% in recent weeks.
The company advised shippers to tender freight four to five days in advance on cross-border lanes and secure reefer capacity early before summer demand peaks.
Cross-border rates climb
Uber Freight said freight rates between Mexico and the U.S. have risen sharply since February.
The report’s Mexico outlook found cross-border rates are up 8% to 15% across the market, while some major corridors have seen increases approaching 30% in just two months. Fuel inflation, produce demand and driver shortages are combining to create upward pressure on transportation costs.
The report also highlighted declining availability of B-1 commercial drivers, a trend that has become increasingly important for carriers serving cross-border freight markets. Uber Freight listed falling B-1 driver capacity among the primary factors tightening Mexico-U.S. freight networks.
Fuel prices add new pressure
At the same time, transportation providers are facing rapidly rising fuel costs.
Uber Freight reported the national average diesel price reached $5.64 per gallon in May, up from $3.72 per gallon in February. The increase was driven largely by geopolitical disruptions in the Middle East and reduced oil flows through the Strait of Hormuz.
The company noted that fuel surcharges are becoming a growing issue in cross-border transportation because many Mexico freight lanes do not have standardized fuel surcharge programs.
Shippers should review fuel surcharge agreements, shorten surcharge adjustment cycles and add fuel accessorials where necessary, Uber Freight said.
Capacity tightening across North America
Beyond cross-border markets, Uber Freight reported truckload conditions are tightening nationwide despite what is normally a softer seasonal period.
Van spot rates increased 24.8% year over year in April, reefer rates rose 26.3%, and flatbed spot rates climbed 23.7%. Meanwhile, spot market volumes were up 44% year over year. First-tender acceptance rates slipped to 82%, while route-guide compliance fell to 86%, forcing more freight into the higher-cost spot market.
Uber Freight said regulatory changes are also contributing to capacity constraints. The company estimates the Federal Motor Carrier Safety Administration’s non-domiciled CDL rule could remove roughly 40,000 drivers annually over the next five years, tightening available capacity even further.
Supply chains remain volatile
International freight markets continue to face uncertainty as geopolitical conflicts, tariff policy changes and shifting sourcing strategies alter global trade flows.
Uber Freight said global schedule reliability remains near 63%, while companies continue diversifying sourcing away from China and adjusting supply chains in response to changing trade policies.
For shippers, the message from Uber Freight is clear: conditions that many expected to emerge during peak season are already here.
“The window to get ahead of these conditions is narrowing,” the report said, urging shippers to secure capacity earlier, closely monitor tender acceptance rates and develop contingency plans for critical domestic and cross-border lanes.
Mexico freight trucking sector outpaces broader economy in Q1
Mexico’s freight trucking sector grew 1.8% in the first quarter of 2026, outpacing both the broader transportation sector and Mexico’s overall economy as cross-border and domestic cargo demand remained resilient.
According to data from Mexico’s National Institute of Statistics and Geography (INEGI), the transport, postal and warehousing sector expanded 0.4% during the quarter, while Mexico’s gross domestic product increased 0.4% annually, reported Mexico Business News.
Freight trucking accounted for 51.4% of the GDP generated by Mexico’s transport, postal and warehousing sector and represented 3.8% of national GDP during the quarter.
1.1M-square-foot logistics center planned in Phoenix area
Houston-based Lovett Industrial and Peakline Real Estate Funds have broken ground on North Park Logistics Center, a 1.14 million-square-foot Class A cross-dock industrial facility in Glendale, Arizona.
The project will be developed on nearly 56 acres in Metro Phoenix’s Southwest Valley, with direct access to Northern Parkway, Loop 303 and Interstate 10, according to a news release.
The speculative development is designed to serve large-scale distribution users and will feature 40-foot clear heights, 197 dock doors, 29 knockout panels and extensive trailer parking.
The first phase is scheduled for delivery in the second quarter of 2027, with a planned second phase adding approximately 623,000 square feet. The project is being marketed and leased by CBRE.
The post Borderlands Mexico: Uber Freight sees earlier peak season, strong Mexico demand appeared first on FreightWaves.
Chart of the Week: Outbound Average Length of Haul – USA SONAR: OALOHA.USA
Despite the ongoing tightening of the domestic truckload market, the trend of shrinking load lengths that began in 2024 shows little sign of reversing. Since June 2024, the average length of haul in SONAR’s tender data set has declined from approximately 607 miles to just above 500 miles — a 21% drop, with 11% of that occurring over the past year alone, making it a fairly linear trend. Is this part of a sustained structural change, or something that could flip in the near future and exacerbate current market conditions?
Perhaps the most interesting characteristic of this trend is its longevity. Most freight trends emerge sharply or follow seasonal patterns. This one looks more like a shift in how shippers utilize trucks as they adapt their supply chain management strategies — which, if true, suggests a more permanent alteration of the market.
The reason this trend matters is that longer lengths of haul occupy more capacity. Longer transit times mean trucks cannot pick up other freight. A load moving from Los Angeles to Chicago covers roughly 2,000 miles and occupies three to four days of a single truck’s time. A load moving from Atlanta to Nashville covers around 250 miles and occupies roughly half a day, depending on loading and unloading times.
In that sense, a shrinking length of haul should have freed up capacity over the past two years, as trucks are cycled more frequently — even despite the strengthening in demand seen recently (up approximately 10–15% year-over-year in early June). Yet tender rejections sit at multi-year highs above 17%, while spot rates are surging across all three main trailer types.
The data suggests that one driver of deteriorating load lengths is the loss of share to railroads in the form of intermodal — a topic we have covered numerous times. Intermodal holds a strong cost advantage over trucking on longer transcontinental lanes but struggles to compete on shorter distances.
Intermodal lost share to trucking during the pandemic when it couldn’t keep pace with demand. Since then, railroads and carriers have invested in infrastructure and expanded capacity to handle greater volume and demand surges. Loaded international container volumes (ORAILINTL) were up approximately 11% year-over-year last week according to SONAR’s intermodal volume data, while domestic container volumes (ORAILDOML) were up 14%.
International container volumes are a direct derivative of imports, as containers are loaded from ships and port yards directly onto trains. Domestic containers typically originate in the U.S. and are transloaded at warehouses.
Intermodal has a cost advantage, but service favors trucking due to its ability to move directly in and out of shipper facilities with fewer touchpoints. Intermodal contract savings averaged between 10% and 20% in 2024 and 2025, but that gap has widened rapidly this year as truckload rates have climbed.
Intermodal pricing is closely tied to truckload, as railroads and carriers won’t leave money on the table. Rates are expected to rise for intermodal this year, but not enough to push loads back to trucking.
The deciding factor for whether a load moves by intermodal or truck is service. Shippers have had ample time to move freight domestically in recent years, as internationally sourced freight has been disrupted by growing global tensions. Houthi attacks in the Red Sea have altered shipping lanes for multiple years, disrupting service patterns. Unpredictable U.S. trade policy has also led many companies to import goods well ahead of expected demand. This just-in-case inventory strategy favors rail, since the extended lead time makes slower transit acceptable.
That dynamic has shifted in recent months, according to the Logistics Managers’ Index, which surveys hundreds of supply chain managers across a broad range of businesses. Inventory levels are now being managed just above replenishment as inventory carrying costs have surged.
Interestingly, this shift has not pushed load lengths higher. Imports have remained low relative to the previous two years, and most of the demand fueling the truckload market has come from moves under 250 miles, pushing carriers toward a more regionalized approach. The recent trend of shrinking load lengths is therefore less about modal shift alone and more about a disproportionate growth in short-distance moves.
Most of the retail freight that dominates the fourth quarter arrives via ship in August and September. Will trucking see a surge in long-haul demand that further deepens the current capacity crunch later in the year — and how will transportation managers respond?
A last-minute import flood could strain transportation networks later in 2025, but it is unlikely to persist, as supply chains have been permanently altered to some degree. It also makes the prospect of a transcontinental railroad merger that much more intriguing.
About the Chart of the Week
The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.
SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.
The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.
To request a SONAR demo, click here.
The post Truckload’s shrinking miles appeared first on FreightWaves.
