Some Interesting U.S. Logistics Statistics
- Highways – 3.97 million miles
- Interstate motor carriers – 674,000
- Rail (Class I) – 99,000 miles
- Navigable channels – 25,000 miles
- Air carriers (major) – 14
- Railroads (Class I) – 7
- Approximately $1.5 billion in containerized shipments pass through U.S. ports each day.
- 20% of all inbound U.S. container shipments pass through the Port of Long Beach (California).
- Each of these containers must pass through one traffic signal. When the light is red, up to 20% of all inbound U.S. container shipments come to a halt.
Logistics and the Supply Chain's Impact on Company Valuation
- A public corporation's stock price can drop as much as 8% on the day a supply chain glitch is announced. (Source: Georgia Tech University)
- When a public company adopts a new distribution or logistics innovation, the company's stock price increases. (Source: Dr. Thomas Speh of Miami University of Ohio)
- Companies employing sophisticated supply chain methods enjoyed 12 times greater profit than companies with unsophisticated methods. (Source: Bain & Company)
Every organization is impacted by the supply chain. Every organization has one.
The U.S. Interstate Highway System
East-West - Longest East-West Interstates
- I-90 – 3,112 miles
Seattle, Washington to Boston, Massachusetts. Goes through Washington, Idaho, Montana, Wyoming, South Dakota, Minnesota, Wisconsin, Illinois, Indiana, Ohio, Pennsylvania, New York, Massachusetts
- I-80 – 2,909 miles
San Francisco, California to Teanack, New Jersey. Goes through California, Nevada, Utah, Wyoming, Nebraska, Iowa, Illinois, Indiana, Ohio, Pennsylvania, New Jersey
- I-10 – 2,460 miles
Santa Monica, California to Jacksonville, Florida. Goes through California, Arizona, New Mexico, Texas, Louisiana, Mississippi, Alabama, Florida
North-South - Longest North-South Interstate
- I-95 – 1,907 miles
Miami, Florida to Houlton, Maine. Goes Through Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Maine
- I-75 – 1,775 miles
Ft. Lauderdale, Florida to Sault Ste Marie, Michigan. Goes through Florida, Georgia, Tennessee, Kentucky, Ohio, Michigan
- I-5 – 1,376 miles
San Diego, California (Mexican Border) to Blaine, Washington (Canadian Border). Goes through California, Oregon, Washington
Gasoline Prices and Cost Breakdown
Historical Gas Prices
(Adjusted for Inflation)
Year - Price per Gallon
- 1950 - $1.91
- 1955 - $1.85
- 1960 - $1.79
- 1965 - $1.68
- 1970 - $1.59
- 1975 - $1.80
- 1980 - $2.59
- 1985 - $1.90
- 1990 - $1.51
- 1995 - $1.28
- 2001 - $1.66
- 2002 - $1.31
- 2003 - $1.52
- 2004 - $1.79
- 2005 - $2.28
- 2006 - $3.03
- 2007 - $3.25
- 2008 - $4.25
- 2009 - $2.75
Source: U.S. DOE
So you just pumped $40 in gasoline into your tank.
That money is broken up into little pieces that get distributed among several entities. Gas is just like any other consumer product: There's a supply chain and several groups who are responsible for setting the price of the product. The media can sometimes lead you to believe that the price of gas is based solely on the price of crude oil, but there are actually many factors that determine what you pay at the pump. No matter how expensive gas becomes, all of these entities have to get their slice of the pie.
Let's look at where your money goes when you pay for gas:
(Source: Energy Information Administration, Official Energy Statistics from the U.S. Government, January 2007)
- Crude Oil - The biggest portion of the cost of gas – about 54% – goes to the crude oil suppliers. This is determined by the world's oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC). The amount of crude oil these countries produce determines the price of a barrel of oil.
- Type of Oil - Sometimes, gas prices go up even though there is plenty of crude oil on the market. It depends on what kind of oil it is. Oil can be classified as heavy or light, and as sweet or sour (no one actually tastes the oil, that's just what they call it). Light, sweet crude is easier and cheaper to refine, but supplies have been running low. There's plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S. , have to undergo costly retooling to handle it.
- Refining Costs - The refining of crude oil makes up about 18% of the price of gasoline.
- Distribution and Marketing - Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy. Together, these two factors account for about 12% of the price of gasoline.
- Taxes - Taxes, including federal and local, account for about 21% of the total price of gas in the United States . Federal excise taxes are $0.184 per gallon, and state excise taxes average $0.20 per gallon. There may also be some additional state sales taxes, as well as local and city taxes. In Europe, gas prices are far higher than in America because taxes on gas are much higher. For example, gas prices in England have risen as high as $6.00 per gallon, with 78% of that going to taxes.
- Station Markup - While it isn't represented in the diagram above, of course some of the actual money you spend at the pump does go to the service station. Service stations add on a few cents per gallon. There's no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. However, some states have markup laws prohibiting stations from charging less than a certain percentage over invoice from the wholesaler. These laws are designed to protect small, individually-owned gas stations from being driven out of business by large chains who can afford to slash prices at select locations.
- Gas prices also vary from state to state for several reasons. Taxes are probably the biggest factor in the different prices around the country. Additionally, competition among local gas stations can drive prices down. Distance from the oil refineries can also affect prices – stations closer to the Gulf of Mexico , where many oil refineries are located, have lower gas prices due to lower transportation costs. There are also some regional factors that can affect prices.
- World events, wars and weather can also raise prices. Anything that affects any part of the process, from the moment the oil is drilled, through refining and distribution to your car will result in a change in price. Military conflicts in parts of the world with lots of oil supplies can make it difficult for oil companies to drill and ship crude oil. Hurricanes have damaged offshore drilling platforms, coastal refineries and shipping ports that receive oil tankers. If a tanker itself is lost or damaged, or leaks its oil into the ocean, that will put a dent in the market as well.