A large majority of America’s trucking industry, owner operators and smaller trucking companies alike, fear they may be priced out of the industry if diesel prices don’t give way soon.
“It used to cost about $800 to fill up. Now we’re talking $1,000, $1,100 to fill up a 250-gallon tank. So yeah, it’s raising every day. Literally, you see fuel prices go up $0.40, $0.50, $0.60 overnight. And an average fuel week was about $1,500, $1600. Now it’s $2,400 a week,” said truck driver Jacinda Duran.
“Right now, obviously, it’s the fuel prices, you know squeezing, small couriers out, carriers out right now. Only the strong are going to survive at this point. So, you know, we’re riding it out. We’re hanging in there, battling those fuel prices. Freight prices are not going up, following the fuel prices. So it’s going to be the last man standing at the end of this,” she continued.
Trucking industry expert, Grant Goodale, founder of Convoy, a service for connecting drivers to shipments, says that part of the reason smaller trucking companies are especially struggling right now is related to contract pricing, and carriers being unable to charge higher rates to accommodate for the price of fuel due to previously agreed on rates.
“A lot of the freight that’s moved in this country has moved under contract, and those freight rates are set annually or less frequently, which makes it hard for the companies that are setting those contracts to flex to accommodate fuel prices that move so quickly,” Goodale said.
“The rates for truckers are not increasing as rapidly as fuel prices are increasing. And that’s what’s putting the squeeze on the small carriers in this nation,” he continued.
Carriers not locked into a contract with set freight rates have been forced to implement larger and larger fuel charges to cover the cost of filling up, which means higher prices for consumers down the line.
“When the fuel goes up, our freight costs have to go up. You know, there’s no other choice,” said truck driver David Lightsey to 22 ABC.
“In the last 6 months, the fuel surcharges have gone up 10 percent to be able to cover our cost in fuel to be able to get our customers their products,” said Georgia-based trucking company, Service Transfer, terminal manager Heather Aeger.
“And it’s not just about now. It’s going to cost in the future as well. Because right now we’re prepping for Christmas. And with that prepping for Christmas, those Christmas things are going to be higher as well,” Aeger said.
Gooddale says that electric trucks may eventually change the industry and eliminate concerns over fuel costs, but believes that the transition to electric rigs will be slow. Truck drivers rely on public infrastructure for fueling up, or charging up, as well as food, parking, and showering needs, and public accommodations for electric trucks may not be seen for quite some time.
“The reality is electric trucks will be impactful in large scale fleets and private fleets where charging infrastructure can be built at the facilities where the trucks pick up and drop off. For the small truckers like Jacinda, they’re dependent on public infrastructure to accommodate their flexible sort of work style, where they’re traveling everywhere and working, in many cases, with smaller companies that either won’t or can’t afford to put in charging infrastructure,” Goodale continued.
“And so, much like the electric vehicle revolution and personal transportation relied on a similar revolution in charging availability, and companies making those cars had to go out and partner or directly install charging stations, for people to be comfortable, something similar is going to have to happen for electrification to be meaningfully impactful for the small truckers of the world, which is 90% of the trucks on the road.”
“Trucking is a passion, and it’s not always a job. To most of us, it’s not a job. It’s a passion,” Duran said.
“And you just have to ride the waves, you know, the ups and downs, the lows and highs, like any industry. And trucking is one of them, and it’s probably one of the first affected by fuel prices, you know, consumer prices. You know, we have to keep going. Essential, we’re so essential. Through this whole pandemic, fuel prices, everything, the truck drivers have continued to go the entire time. It’s just what it is. But the strong will survive. And those who make it will definitely come out stronger, and I’d say more beneficial on the other side.”