[Freight Weekly] Senate Dems Press Garland to Investigate Oil Industry

🔍Senate Democrats want the U.S. Justice Department to investigate oil industry price-fixing and potential links to OPEC, OPEC+🔍

Senate Majority Leader Chuck Schumer, D-NY, and 22 other Senate Democrats have asked the U.S. Justice Department to investigate alleged price-fixing and collusion with oil companies and OPEC member countries. What to know:

• Leader Schumer and his colleagues sent a letter to Attorney General Merrick Garland to “use every tool” to investigate, prosecute, and stamp out price-fixing between oil companies and OPEC member states.

• The call comes after the Federal Trade Commission (FTC) found that Scott Sheffield, the former CEO of Pioneer Natural Resources, colluded with OPEC and OPEC+, potentially raising international crude oil prices.

• FTC approved the merger of Exxon and Pioneer but barred Sheffield from joining the newly merged company that was announced in 2023.

• Sheffield’s collusion may have increased an American household's annual fuel costs by up to $500 per car. Senate Democrats called it “an unwelcome tax that is particularly burdensome for lower-income families,” according to the Associated Press and other news media.

Bottom line: If Attorney General Merrick Garland finds cause to open up a criminal investigation, this could be catastrophic for the big oil industries.

CONTEXT: Former oil CEO blasts FTC over collusion allegations

💸Shipping container costs are hitting $10,000💸

Reports indicate that shipping containers in transit from Asia exceed at least $10,000 per container. A variety of factors is driving this extreme price surge:

• CMA CGM says it is raising costs — a $7,000 rate for a 40-ft container for the second half of June 2024 for routes to northern Europe from Asia. Premium rates are capping at $10,000, Bloomberg reports. 

• Other reports indicate that factors driving high rates for containers include the ongoing crisis in the Red Sea, the rise in demand, and more.

• "Demand reached record levels in Q1 2024, up by 9.2 percent compared to Q1 2023," said Emily Stausbøll, Xeneta Senior Shipping Analyst, via the Maritime Executive’s coverage on the record rates of shipping containers.

Bottom line: Shipping container rates of $10,000 and above are bringing us back to COVID-19 pandemic-era rates. This is the latest chapter in the rollercoaster ride for ocean freight rates spanning at least four years.

CONTEXT: Sudden container crunch sends ocean freight rates soaring, setting off global trade alarm bells

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📈 BY THE NUMBERS

⛽ Diesel: $3.758 gal (⬇️from $3.789 last week) - EIA

✈️ Air Cargo Index (April ‘24): 177.2 (⬆️from 170.5 in March ‘24) - FRED

🚢 Global Container Index: $3,413.20 (⬆️from $3,107.80 on 5/23) - Freightos

📰  WHAT ELSE IS GOING ON IN FREIGHT

🆙US freight rail traffic volumes see a slight increase: Association of American Railroads data shows intermodal volumes have increased by 1.2 percent. More…

✊Canadian customs and border officers prepare to go on strike: CBS local affiliates along the U.S.-Canada border are on alert at the possibility of border and customs officers for the Canadian government going on strike. Read…

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