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Diesel Fuel Costs Affecting The Trucking Industry

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These days, there's an apparent glut in the diesel market, meaning there's more diesel available than there is demand for it. That's good news for flatbed transportation companies, and indeed the the entire transportation industry. With diesel prices running 28 percent less than a year ago, there are certainly benefits to be reaped. But, just how are lower diesel fuel costs going to affect the trucking industry now and into the foreseeable future?

Lower Operational Costs

Clearly, lower fuel prices means that it costs less money to keep trucks rolling down the road, but just how much less? The average commercial truck uses 20,500 gallons of fuel over the course of a year. At last August's prices of right around $3.85 a gallon, that would come to $78, 925. This year, however, with an average price of $2.77, that same volume of fuel will only cost $56,785. That's a substantial savings, especially when you take into consideration that fuel is one of the largest expenses for trucking companies, constituting at least 39 percent of the costs. …show more content…

Expedient delivery of goods outweighed the cost differential. However, since intermodel transportation pricing is governed by fixed costs, such as terminal expenses, not fuel costs, shipping costs will remain higher in this area. Now, lower fuel costs will further help to increase the use of trucks, rather than rail for transportation. This type of shift has not been seen in the industry since 2010, but it appears the trend will continue for the foreseeable future.

Fuel

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