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Trucking Companies: What’s Driving Up Fuel Costs and How Can You Save?

Here’s why this matters: fuel equals about 21% of motor carrier expenses. In 2018, a barrel of benchmark crude oil cost a whopping $72, compared to an average of $60 per barrel at the end of 2017. Diesel prices peaked at $3.37 in 2018, significantly higher than 2017's high of $2.90. As fuel prices soar, shipping companies are increasing rates to transport goods. The cost per mile to ship everyday, non-refrigerated “dry goods” has seen a 40% increase since 2017, according to DAT (Dial-a-Truck) Solutions.

But trucking companies aren’t the only ones being affected. Donald Broughton, author of the Cass Freight Index publication, says that a 10% increase in transportation costs turns into a 1% inflation increase for the rest of the economy. In other words, rising fuel and shipping expenses are creating a massive domino effect. Increasing transportation costs also raise manufacturing and retail expenses, which will eventually hit consumers with higher priced goods.

Let’s look into some practical ways to cut costs:

  • Applying fuel surcharges on loads has helped many trucking companies compensate for the increased cost of fuel.
  • Teach your truckers how their driving habits can improve fuel efficiency. (E.g., accelerating or decelerating gradually, less time idling, and being prepared for weather conditions on the road.)
  • Maintain proper tire alignment and keep your loads below the maximum weight limit of your trailer.
  • Ask your drivers for suggestions on how to increase fuel efficiency. They’ll likely have some useful insights, so implement and reward the best ideas.

Fueling Efficiency

Trucking companies are taking a real hit from the climbing costs of oil, diesel, and shipping. And as transporting goods becomes more expensive, American consumers are feeling the sting as well.

How can your company meet these challenges? It’s all about efficiency and conservation. Better driving habits and a motivated, fuel-conscious crew will help your company protect profits in the face of rising fuel costs.

This blog post does not provide insurance advice and is intended for information purposes only. It is not a substitute for professional insurance advice from a licensed representative. Never ignore professional insurance advice because of something you have read in this blog post. Contact your licensed representative if you have any questions about your insurance policy.
  • Josh Freet

    ZINC's Contractor Insurance Expert

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