Will Rising Fuel Prices Threaten Trucking Going in to 2017?
Heading into the next year, things look promising for the freight industry. Carriers are expecting increased demand next year, and some of the more burdensome regulations imposed on drivers may soon be reduced or even lifted. But while much of the outlook is positive, there is one lingering issue which pay pose a problem for trucking in 2017 – rising fuel prices.
Carriers have plenty of expenses to manage between drivers, rig upkeep, logistics management, and regulatory compliance. But fuel continues to account for roughly one-third of the average trucking company’s expenses.
A move by the Organization of the Petroleum Exporting Countries to cut oil production have resulted in fuel prices climbing by as much as 10% in some places. The US Energy Information Administration noted that diesel hit its highest prices in over a year.
Manageable fuel prices have been one of the things that helped carriers during rough times over the past couple years. When prices rise, carriers can usually cover the costs via fuel surcharges. But during times where freight volumes are flat, this can sometimes put small carriers at a disadvantage.
However, the trucking industry has dealt with much worse. These price jumps don’t compared to the fuel costs of 2008, and carriers are saying that fuel costs accounted for a lower-than-normal share of their expenses last year.