How Trucking Companies are Coping with High Diesel Prices

Businesses across the manufacturing and distribution industry continue encountering challenges, from finding qualified employees to organizing their financial papers to match increased commodity prices. But the most problematic challenge that the industry is facing is the continuous rise in diesel costs in the past years. It is evident that a trucking company’s second greatest expense is the diesel costs, and unfortunately, it is on the rise. Let’s look at how trucking companies cope with high diesel prices in the United States.

Trucking Industry in the United States

Trucking is undoubtedly one of the businesses Americans take for granted, even though it is so large that we couldn’t picture our lives without it. Approximately 3.5 million truck drivers in the United States transport nearly 70% of total freight tonnage. It accounts for the majority of overland freight movement in the United States, with a market valued at $732.3 billion. The trucking industry in the United States is categorized into three primary categories: full truckload, less-than-truckload, and couriers.

According to statistics, trucking transports 71% of all freight in the United States and accounts for approximately 6% of all full-time jobs in the country. The freight industry employs millions of people and generates billions of dollars in yearly sales. The trucking business is critical to the economy, and without it, America would come to a grinding halt.

Diesel Costs on the Rise

Nowadays, even if oil remains unchanged if the link between crude and diesel undergoes fundamental changes that add 10 to 15 cents per gallon to the spread, those gains will affect the retail price of diesel. Presently, diesel fuel prices have reached an all-time high, climbing 18.15% and 57.85% from last year, averaging $4.849 per gallon nationwide. With an already uncertain and overburdened freight market, these sharply rising prices significantly impact fuel surcharges, transportation costs, and logistics budgets.

Shippers and carriers are preparing for the immediate impact of increased fuel prices and the possible long-term consequences on their end customers, who may eventually see cost rises if fuel prices remain high.

Trucking Companies Coping with High Diesel Prices

The business of transportation is complex in many aspects, including diesel costs. Owner-operators, long-haul drivers, flatbed truckers, tankers, and heavy haulers have various business approaches. What is beneficial to one person may not be beneficial to another, and vice versa. With that said, a lot of trucking companies are already dealing with higher fuel expenses and are bracing for more hikes in diesel prices. According to the US Department of Energy, average diesel prices have increased by more than 44 cents a gallon since the beginning of the year. 

Given the many other factors affecting the trucking industry, there are various ways to manage the overall transportation cost:

Reducing Unnecessary Expenses 

Reducing unnecessary spending is one of the first ways trucking companies deal with increased diesel rates. These include reduced empty miles, shorter idling periods, and better truck maintenance. By lowering these costs, truckers can save money on fuel and avoid losing business due to a big rate hike.

Organizing the trucks’ space and shipment locations.

More trucking companies are optimizing their shipments by transporting more loads with fewer trucks. They often examine their customers’ orders and shipments, determining if they can combine pickups and send a full truckload from each designated location. Whether it is still short on capacity, businesses communicate with their customers if they have other product requirements or if their shipment schedule is flexible enough to accommodate a full truckload.

Discovering New Markets and Customers

Diversifying the freight you haul or extending into new geographic areas is the best advice for those wishing to expand their customer base while minimizing the cost. Diversifying freight kinds might be difficult if it necessitates equipment upgrades. However, the most important point is that squeezing more value out of existing connections may not be the best strategy. That’s why discovering the customers and new markets while diversifying to transport your freight is critical to controlling expenses.