The Department of Energy reported that the national average diesel price has risen 70.7% from a year earlier to $6.18 a gallon, putting cost pressure on trucking companies heading into the holiday shipping season. Transport Topics reported that disruptions to key shipping lanes tied to the conflict involving Iran are a major driver of the increase.
WiseTech Global data showed fuel cost per mile for the average shipper up 92% from a year ago. Fuel now accounts for 22% of total transportation spending, compared with a long-term average of about 15%, according to Stephen Husk, WiseTech's director of data services. Most shippers pay carriers fuel surcharges tied to a weekly DOE price index, so carriers on flat all-in rates absorb increases directly and wait weeks for reimbursement on surcharge-based freight, which creates a cash flow gap.
John Tirado, president of Summa Energy, said every 10,000 gallons a fleet burns now costs more than $25,000 above the start-of-year level. He said wholesale diesel has moved 20 cents or more in a single day 30 times this year, a pace no surcharge formula can track. Jason Wald of Anderson Trucking Service said rising fuel has tightened capacity and that smaller carriers absorb the largest share of costs that cannot be passed along. Lars Offerdahl, also of Anderson Trucking Service, said surcharges lag price moves in both directions.
Dean Croke, principal analyst at DAT Freight & Analytics, calculated that higher fuel costs since the start of the conflict explain about a fifth of the rise in trucking rates since last year. He identified tighter capacity as the larger influence on rates going into peak season, and said fuel weighs most on longer hauls and refrigerated freight.
Source: Transport Topics - https://www.ttnews.com/articles/diesel-costs-squeeze-trucking