Here’s why this matters: fuel equals about 21% of motor carrier expenses. In 2018, a barrel of benchmark crude oil cost a whopping $72, compared to an average of $60 per barrel at the end of 2017. Diesel prices peaked at $3.37 in 2018, significantly higher than 2017's high of $2.90. As fuel prices soar, shipping companies are increasing rates to transport goods. The cost per mile to ship everyday, non-refrigerated “dry goods” has seen a 40% increase since 2017, according to DAT (Dial-a-Truck) Solutions.
But trucking companies aren’t the only ones being affected. Donald Broughton, author of the Cass Freight Index publication, says that a 10% increase in transportation costs turns into a 1% inflation increase for the rest of the economy. In other words, rising fuel and shipping expenses are creating a massive domino effect. Increasing transportation costs also raise manufacturing and retail expenses, which will eventually hit consumers with higher priced goods.
Let’s look into some practical ways to cut costs:
Trucking companies are taking a real hit from the climbing costs of oil, diesel, and shipping. And as transporting goods becomes more expensive, American consumers are feeling the sting as well.
How can your company meet these challenges? It’s all about efficiency and conservation. Better driving habits and a motivated, fuel-conscious crew will help your company protect profits in the face of rising fuel costs.
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