Fuel prices recently exceeded a 7-year high and freight haulers are being forced to pass along the added expense to everyday families.
According to reports from the U.S. Energy Information Administration, No. 2 diesel surged to $3.39 per gallon in July, on average. The last time fuel rose that high was in 2014, during the tail end of the Great Recession. But unlike 2014, the trucking industry could face rising fuel costs rather than declining ones.
California ranks as the highest place to fuel up due to the state’s hefty taxes that top all others at $0.63 per gallon. Diesel prices in the Golden State hovered above $4 per gallon in July and some expect they could average over $5 unless the supply chains are repaired. The excessive fuel costs are typically rolled into freight-hauling expenses, increasing the price consumers pay for the more than 70 percent of goods and materials delivered by truck.
Everyday people have experienced shocking inflation, and the high price of fuel serves to exacerbate the trucking industry’s ability to transport items fast enough to meet demand. Although wide-reaching reports indicate that inflation hit a 13-year high in June, optimistic economic insiders believe the issues have peaked.
“June’s CPI numbers looked scary, but once again, we see that it was mainly temporary price increases that pumped up the figures,” Navy Federal Credit Union economist Robert Frick reportedly said. “Overall, this report is consistent with inflation cooling off later this year.”
Those in the trucking industry may see things differently.
One of the less-discussed issues regarding fuel hikes involves the increase in driver demand. It’s well-known that the country is down more than 61,000 qualified CDL-holders. But what compounds the shortage in terms of fuel prices is that fewer truckers want to jump through the hoops required to haul fuel. The rub is that diesel and common gasoline are also transported by truckers.
“It used to be an afterthought for station owners to schedule truck deliveries. Now it’s job No. 1” Oil Price Information Service analyst Tom Kloza reportedly said. “What I’m worried about for July is the increased demand works out to about 2,500 to 3,000 more deliveries needed every day. There just aren’t the drivers to do that.”
Because the U.S. Department of Transportation classified gas and diesel as hazardous materials, truckers are tasked with meeting stringent guidelines. Given the demand and abundance of short-haul opportunities, experienced drivers are not champing at the bit to truck fuel.
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