If there’s one topic that’s dominating supply chain discussion in 2022, it’s fuel prices.
The trucking industry remains the U.S.’s preferred freight modality even in a time of economic change and uncertainty. Along with trucking demand, diesel prices keep climbing – and the continual increase is hitting everyone.
With truckers, carriers, and even end consumers all feeling the dispersed cost of this constant expense, the rising prices have many people asking some very important questions.
Where are prices the highest, and have they spiked? How can the trucking industry plan around this problem, and what will the future hold for diesel prices?
Prices Are High, with Some Areas Ahead of Others
It’s been a wild ride for the trucking industry in terms of fuel prices so far in 2022. Truck drivers went from paying less than $3 per gallon just a couple years back to about $4 at the start of this year.
Prices continued climbing steadily, peaking around the $6 mark back in Q2-Q3. With the holiday shopping season coming in, which is known to the trucking industry as the holiday shipping season, it’s a time where prices are in the spotlight like never before.
They’ve recently dipped below $5 in some areas, creating a slightly more favorable condition than the previous month offered. While it isn’t ideal, it’s a metric that truck drivers will have to share the road with as they gear up for the busiest time of the year.
As this chart shows, the West Coast has been getting the worst of diesel prices, resulting in a situation where Eastern states are likely to save money on their trucking routes as a whole. But no matter the fuel price or location, every trucking company must take a closer look at their practices in this situation.
How Fuel Prices Are Changing Trucking Routes
The trucking industry is facing its most challenging time in recent memory thanks to fuel prices. Some drivers of decades say they’ve never seen a year like 2022.
These days, it’s common for carriers to take a closer look at their logistics and freight management. Empty miles are costlier than ever, so routes are being planned to use capacity wisely. Unfortunately for some customers, this could leave them facing longer wait times or higher surcharges.
For example, a customer that’s outside a trucking company’s primary route with no other stops around them represents a more expensive trip, regardless of the price of the freight they’re shipping or the length of time they’ve worked with a carrier.
Fuel prices were already in the top three concerns of truck drivers last year, so trucking companies have been planning ahead for a time like 2022. But how will these plans evolve for the future?
Changes Heading into Q4 and 2023
With the busiest shopping season of the year picking up, the trucking industry is rolling on to meet the demand – even in spite of adequate staffing numbers.
With driver shortages further driving up freight prices, carriers could still come out ahead despite diesel costs if they plan their routes carefully. Companies are also expected to invest in more sustainable diesel engines and renewable diesel.
While some believe diesel rigs are at odds with the sustainability movement, some advances make them the most efficient option for both business and the environment.
But it isn’t just diesel fuel’s place in the energy conversation that will impact its price. Sanctions on nations due to geopolitical tensions as well as inflation in the energy sector could also cause fuel prices to rise back up. Don’t forget the added demand from other diesel-dependent industries, like agriculture.
How do you think the price of diesel will change through the holiday shipping season and into next year? What factors do you think will impact prices? What are they where you live? Let us know your thoughts.