Volatile Fuel Prices Remain a Concern in Trucking Industry
Fuel prices always seem to be a concern, especially if you’re running a freight company in Los Angeles or California where fuel prices tend to be high on average compared to most other areas. The fuel market can be fairly unpredictable and can change significantly in only a short period of time. The price of gasoline compared to diesel can also swing one way or another. One day gasoline will be more expensive than diesel, and the next day they flip flop. Fuel prices are also currently experiencing significantly high prices. Right now, the national average of gasoline is $3.74, with the average price of diesel at $4.03.
Trucking companies like us are certainly susceptible to the frequent ups and downs of fuel prices. These price fluctuations can especially be an issue when trying to provide customers with excellent prices and services on LTL shipping while also trying to maintain a healthy financial bottom line.
At Best Yet Express, we are constantly asked about the fluctuating fuel costs. There are many factors that go into determining the prices of gasoline and diesel fuel and they subsequently affect our pricing scale. Two big reasons for fuel price fluctuations are the oil trading industry and the supply and demand of crude oil. The oil trading industry is very unpredictable and includes things like oil contracts and futures. Crude oil prices are currently high due to strong global demand, limited spare oil production capacity, and political instability in some oil producing regions. Local market influences like supply, demand, competition and government regulation also play a part in fuel prices, as do worldwide demand and taxes.
Companies are being more proactive in their quest to lessen their susceptibility to fuel price volatility. According to a group called Eyefortransport, since 2008, companies have taken various actions, including upgrading their trucks to fuel-efficient diesel, natural gas, electric or hybrid rigs. Additionally, companies are encouraging drivers to change their driving habits and are using software to do various tasks, including the logging of speed and engine performance, choosing driving routes and even shutting down engines to reduce idling time. At Best Yet Express, we are invested in helping our clients understand fluctuating fuel prices.
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