Impact of IMO 2020 on Freight Sector

Discussion in 'Ask An Owner Operator' started by ElijahJohn1, Aug 24, 2019.

  1. ElijahJohn1

    ElijahJohn1 Light Load Member

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    Given that the Freight Sector is already in a slump/recession, how will the predicted rises in diesel fuel costs of around $0.30/gallon impact the sector? I understand in the long run diesel prices will level out, but will there be catastrophe in the 1 year of these prices fluctuations? On an additional note, do any owner operators/fleet owners hedge fuel losses through futures contracts and if so how was your experience? Thanks
     
  2. Brandt

    Brandt Road Train Member

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    They have fuel surcharge most get to makeup for sudden rais in fuel prices.
     
  3. johnnyman1099

    johnnyman1099 Medium Load Member

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    Here is what I do not understand. Back in 2008, fuel cost was over $4/gal in California, NY, PA. Crude oil was selling at over $100/barrels.

    Right now, Crude oil is selling at $54/barrel. Yet our diesel fuel is almost $4/gal in these same states.

    Shouldn't diesel fuel be less expensive with oil prices being cut in half ?
     
  4. Midwest Trucker

    Midwest Trucker Road Train Member

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    Taxes have gone up pretty much everywhere. It would be $5/gal if oil went back that high.

    To answer the OP question. I don’t think diesel is going to go up. The U.S. is pumping oil like never before and our President will not allow oil to get that high again. He sees it as a tax on businesses which he does not want. That’s my opinion.

    If it went up just 30 cents nobody will really care. Yeah, the guys already on the edge will go out of business a little sooner but that’s about it. Nothing huge.

    The big dogs hedge fuel but the smaller guys just use fuel cards which the people who control the purchasing for those co ops are hedging like the big boys.

    Edit: I will say I’ve been doing my best to update my tractors and get my fleet wide mpg up. These hard times call for increased efficiency. This time last year we were at 6.4 across all trucks, now we’re at 7 even. This is also a way to hedge against fuel increases in the future.
     
    Last edited: Aug 25, 2019
  5. Ridgeline

    Ridgeline Road Train Member

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    It is in a slump?
     
  6. starmac

    starmac Road Train Member

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    In the past I have seen as much as a 10 cent rise start closing out guys in a months time lots of trucks were parked and given back to finance companies.

    We usually are around a buck higher than the national average, but we are just under 3 bucks here, better than usual for some reason. I actually liked it when fuel was at 5 bucks here, I made money on the fuel surcharge, basically had free fuel, and a hundred dollar bill thrown in for good measure.
     
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