Fuel prices are undoubtedly headed north for the foreseeable future. Certainly, the war between Russia and Ukraine contributes to the overall problem of high fuel costs. But inflation was a factor in the rising cost of gas and oil in the United States before the first shot was ever fired in Eastern Europe.
Regardless of its genesis, some of the hardest hit groups are independent truckers and smaller transport companies in America. Figures from AAA cite the current average of $5.25 per gallon for diesel as nearly $1 more than last month.
Rate Hikes Unsustainable for Future Growth
Inevitably, if this trend continues, some small transit companies and independent truckers will no longer be able to afford to remain competitive in the industry. Some will likely close their doors and park their big rigs until they can once again afford to work.
If anyone thought the pandemic was rough for truckers (and it was and is a major problem), the rising costs of fuel may be the death knell of a certain subsection of the transportation industry.
According to the executive vice president of the Owner-Operator Independent Drivers Association Foundation Inc., Lewie Pugh, “When fuel rates start jumping double or more, it really puts a pinch on small business owner-operators.”
Pugh added that, “Fuel is the largest expense for a trucker,” and with prices as high as they are right now, truck drivers who travel 100,000 miles or more each year will wind up forking over $60K annually just for fuel.
Shaving Profit Margins Ever Slimmer
At the rate of inflation and with fuel costs rising higher, attrition will definitely leave its mark on the trucking industry. With no corporate perks to offset the prohibitive cost of fuel, independent drivers will find themselves squeezed out of the competitive transit market.
There is no cushion there for small companies and independent drivers. There’s no way to maintain fuel surcharges according to the present formula that looks to weekly averages. Fuel costs are bumping up so fast and so high that it becomes futile to try to keep pace with the market.
Big Rig Investments Allow Little Wiggle Room
If you are an independent trucker, you probably juggle monthly home mortgages as well as large notes as payment for your semi truck. When life was more normal and fuel costs weren’t sky-high, this was doable. Now, however, not so much.
Your best hope is to somehow keep afloat through these troubling economic times. As the adage says, “This, too, shall pass.” We hope that the nation’s independent truckers and small transit companies can manage to hold on, weather this fiscal storm and survive.
Source: yahoo.com
Tell the truth! When Biden closed down the Keystone pipeline the first day he was in office. I watched him do it! The fuel prices have steadily started to rise. And now look at the mess. Absolutely horrible.
100% TRUE!!!
Without a doubt. Let us not forget where the blame “lies”( pun intended)
When there is a hurricane in the gulf, the excuse is it will put a strain on supply because large amounts are produced there, when there is war in Middle East, then large amounts comes from there, no matter where conflict comes from, it’s a reason for public service politicians to serve the public with higher prices so that they can increase there pocket books and take more away from us to invest in place like Cayman Islands or Switzerland etc.
Day one senile Biden sign 77 executive orders to kill oil industry