The rising gas prices have affected the trucking industry tremendously. Also, let’s not forget that they’re still struggling with labor shortages and supply chain disruptions due to the ongoing pandemic.
This recent surge in fuel prices is costing fleets tens of thousands of dollars in just a matter of a week. Even when diesel prices increase by 5 cents truckers feel the impact, so imagine it going up a whole dollar.
The CEO of Swint Logistics Group fears these costs will ultimately end up on the consumer. If you think about it, every product we use is transported by truck. If it’s costing more money to transport goods then the price for these items will climb.
In this article, we’ll discuss how trucking companies are being hit hard by the surging gas prices and how it’s impacting fleets’ overall costs.
Gas Prices Reach Record High
Due to the record-high inflation levels, the US is already paying much more than it previously would for nearly everything. To add to that comes the sudden surge in gas prices. Earlier this week, consumer inflation appeared to be 7.9% higher than last year. According to the Consumer Price Index, this is the sharpest spike in the past 40 years.
The weekly update from the Department of Energy shows some unbelievable statistics. According to the report, diesel prices have increased by $1.15 during the first couple of weeks in March. This is the first time in history that diesel has been more than $5 nationwide.
Although everyone is feeling the impact of the recent gas increase, California’s diesel prices have jumped the most by 50.5 cents and have surpassed $6 a gallon. Additionally, the West Coast (excluding California) experienced a 43.4 cents increase. Currently, you can find the cheapest diesel in the Midwest and Rocky Mountain region.
The diesel prices in other regions are as follows:
- Gulf Coast: $5.11
- New England: $5.23
- Lower Atlantic: $5.26
The Impact of Rising Gas Prices on the Trucking Industry
The recent surge in gas prices is resulting in consumers changing their shopping habits, which in turn affects truckers. More and more people are turning to online shopping as their way to receive their goods, which is putting more pressure on the trucking industry. As consumers save on gas through online shopping methods, the need for shipping and transportation increases.
As a result, many trucking companies are looking for different revenue streams to have more control over their money. Experts suggest truckers partner with warehouses and companies to acquire direct contracts for their trucking services.
Also, as expected fleets are having to cut costs to make up for the high gas prices. Unfortunately, some independent owner-operators or smaller fleets are having to exit the industry due to the rising costs and pressure. Not to mention, the workdays are lengthened since many truck drivers are waiting in long lines to refuel.
The average diesel price in the US has risen by nearly 75 cents causing the per gallon amount to surpass $5. As a result, the trucking industry is being hit hard and still recovering from labor shortages and supply chain issues. There’s a growing concern for how these obstacles will affect the trucking industry in the future.