With no exception, rising fuel prices continue to affect every single sector, the trucking industry included.

As we continue to hurdle through these prices in the spring and perhaps until the summer, let’s take a look at some reasons behind this continuous surge in fuel prices, its impacts on the trucking industry, and what we could do to conserve fuel.

Primary Reasons behind Rising Fuel Costs

1. Oil Production and Demand Remain Imbalanced – While the pandemic slowed down the demand for oil for almost a year, oil-producing and oil-exporting countries reduced their yield by as much as 10% of the global supply.

Despite the reopening of borders and resumption of travel with eased restrictions, oil production rates at present still cannot meet the pre-pandemic demand levels that are manifesting right now as supply is still lagging behind. Though efforts have been put in place to address this starting July 2021, experts say that it might have been too late and it will take some time before these could be felt. 

2. Sanctions Imposed on Russia – While the global economy still has not fully recovered from the disruptions caused by the pandemic, here comes another global issue that has caused ripples affecting the global economy–the crisis in Russia and Ukraine. The White House has imposed a ban on Russian gas and oil imports, which is Russia’s primary source of income. This has made it difficult for Russian oil to penetrate the global market, which consequently affects the prices of oil from other exporting countries and even other commodities.

Though the United States does not fully rely on Russia for oil imports, the ban still increases the price of oil from other exporting countries, hence the price increase when it reaches American consumers.

How It Affects the Trucking Industry

At a record high of about $5 per gallon, fuel prices have made a huge dent in trucking companies. Basically, if prices continue to stay this way, experts say that people could go out of business. The number of active trucks in a fleet could be lessened, or in some cases, an entire fleet could remain parked to cut down on expenses, which could result in huge repercussions for the trucking business.

These include cutting into trucking margins and even penetrating into empty-cargo “deadhead” miles,  post-delivery, and other relevant costs which will even increase prices. If more businesses face financial challenges and even closures, this could mean massive stalling, delays, and further downtimes in the trucking industry.

The trucking industry will not be carrying this burden alone, but other sectors will feel the weight of these fuel price surges as well. 

According to the American Trucking Association, more than 70% of freight is moved by trucks and because of the surging fuel prices, everything else could experience a price increase, from food and clothing down to supplies and materials. Fuel prices are directly proportional to the cost of living; so, if fuel prices increase, the cost of living will also increase.

Tips to Save Fuel

As prices will remain high for weeks or even months to come and since the situation is still unpredictable, the burden is now on the consumers to practice fuel saving. Here are some of our tips for you to save fuel:

1. Fine Tune Your Truck – Ensure that you have correct tire pressure, get rid of unnecessary weight, activate cruise control on the highway, use the air conditioning wisely, and regularly conduct preventive maintenance. These will help your truck run at optimum capacity and avoid eating up extra fuel.

2. Maximize Technology – Use apps to optimize your route, thereby avoiding traffic and stalling, elevating or uphill roads, and even helping you choose straight paths with fewer turns. There are also apps that help you find cheaper fuel along the way.

3. Make Use of a Fleet Fuel Card – A fleet fuel card comes with a fuel management program that analyzes fuel expenses, builds a fuel purchase report for fleet managers to look into, limits the grade of fuel purchased as well as non-fuel-related purchases, and lets the company set certain limits to avoid unnecessary expenses.

Aside from this, fuel cards also help track multiple refuelings or anomalous fuel transactions. You can get a fuel card from trusted and reliable sources like the Innovative Logistics Group. 

As we continue to tread through these challenging times in the face of fuel price surges, we are committed to helping you sustain and achieve your trucking goals.

For all your needs in the trucking industry, talk to us today.

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Questions Carriers Ask

Why do fuel prices keep rising?

A primary reason in the article is that oil production and demand remain imbalanced, since the pandemic slowed demand for oil for almost a year and production has not realigned smoothly. When demand outruns supply, prices climb.

How do rising fuel costs affect the trucking industry?

Rising fuel prices affect every sector with no exception, and trucking feels it directly because fuel is a core operating expense. Sustained surges squeeze margins, so carriers have to manage consumption deliberately.

What can I do to conserve fuel right now?

The article closes with practical tips to save fuel. Focus on the habits and maintenance practices within your control, since you cannot control the price at the pump but you can control how much you burn.

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