Fleet fuel costs were the biggest concern for truckers in 2022
The most pressing worry of the American trucking industry is how to cut fleet fuel expenses, according to a new American Transportation Research Institute (ATRI) study. This will be the first time in nine years that this topic has been on the top 10 list. The issue of a lack of drivers has been the top worry for five years running until this year.
Here are some reasons why those involved in the trucking business are so concerned with fuel expenses, as well as some tips on how to cut fleet fuel expenditures.
Why fuel costs are a priority concern
Geopolitical and financial factors are still disrupting many sectors and people’s lives two years after the COVID-19 pandemic. Finding the precise source of enduring issues like supply chain limitations, staff shortages, and inflation is no easy undertaking. Let’s look at the tangibles to see why the trucking sector is extremely concerned about the growing diesel fuel costs.
Record-breaking diesel fuel costs
The gasoline cost per mile has climbed by more than 35% in 2022, according to ATRI research. Additionally, it says that west coast fleet services spend the most per mile on gasoline ($0.431). Owner-operators are adversely impacted by these gasoline price increases since they frequently deal in spot markets.
Many owner-operators are compelled to include rising gasoline prices in their operational costs because these sectors are less accommodating with fuel costs.
Limited availability of diesel fuel
The availability of diesel across the world affects its price. Additionally, diesel fuel stockpiles have now fallen to all-time lows. Energy sector analysts predict that we would have around a 25-day supply of diesel fuel if manufacturing of the fuel ceased today.
We should be grateful that diesel manufacturing continues. However, the frighteningly low supply of accessible diesel fuel pushes trucking fuel prices higher and makes it very challenging to cut fleet fuel expenditures. The possible situation is further exacerbated by striking refinery employees in France.
Effect of the Ukraine-Russian conflict on diesel fuel costs
The invasion of Ukraine by Russia had an effect on the world energy market, particularly in Europe. Europe is significantly dependent on the Russian hydrocarbon sector due to the lack of natural energy resources there, making it Russia’s largest consumer. Over 80% of the oil consumed in some nations, like Finland and Lithuania, is imported from Russia.
Due to Europe’s tardy comeback from the COVID-19 epidemic, Russia’s oil output was already low when its invasion of Ukraine started. Following this, the U.S., Europe, and other Western nations imposed economic sanctions that made it much harder for Russia to produce oil and gas.
Influence of macroeconomic and geopolitical factors on fuel costs
Experts in the trucking business are worried about both the present situation of diesel pricing and its potential future. It is currently impossible to predict how long geopolitical conflicts will affect the world’s supply of gasoline. President Biden outlawed imports of Russian coal, natural gas, and petroleum into the United States on March 8, 2022.
The majority of media sites emphasized that just 3% of the U.S.’s crude oil imports come from Russia.
However, according to data from 2021, the United States imported 20% of its petroleum products from Russia. As a result, this embargo contributes to a decline in distillate commerce and restricts the availability of U.S. diesel, which raises fleet fuel costs.
Inflation can also affect the refinement of diesel. Diesel refiners have rising feedstock costs, supply chain constraints, and rising labor expenses, much like many other sectors. Fuel prices have increased as a result of these ancillary expenditures for refining diesel.