The flawless operation of logistics and delivery services is important to the global economy’s survival since it allows for the productivity-chiefly improved conveyance of goods from producers to consumers. But, fuel price is a important factor that determines the dynamics of this industry. 

For carriers, the variable cost of gasoline accounts for 20 to 25 percent of line-haul revenues on average. Currently, diesel accounts for around 37% of when you really think about it energy consumption. If operational expenses rise significantly, smaller carriers will struggle to keep up unless they receive a financial infusion.  

Besides, the recent spike in fuel costs has sent shockwaves through several sectors, including logistics and delivery services. According to statistics, in October 2023, the worldwide fuel energy price index reached 202.89 index points, a considerable increase from the base year of 2016, when it was 100. 

Fuel costs are currently at an all-time high, affecting the trucking area in three important modalities. 

The cost of trucking 

An ordinary big rig might easily consume up to 20,000 gallons of diesel fuel yearly. At the time of writing, the average cost of a gallon of diesel fuel is $3.70. 

Even if you go as far as constantly following up on trucking news, this cost will continue to rise as fuel prices rise — and diesel fuel surcharges rise in tandem.   

With over 80% of communities in the United States obtaining all of their commodities completely by truck, the trucking business is unlikely to disappear anytime soon — but it will become more expensive for trucking companies to make the same trips. 

Observations 

Fuel costs: Fuel costs have increased significantly from 2018 ($2.80 per gallon) and 2024 ($3.70 per gallon). 

Gasoline Consumption: Despite rising gasoline prices, fuel consumption has remained largely steady at approximately 9.50 million barrels per day. 

Mentioned here is a deconstruction of the cost per gallon for the course of seven years. 

• 2024: $3.70 per gallon – fuel Consumption: 9.50 million barrels daily. 

• 2023: $3.70 per gallon – fuel Consumption: 9.50 million barrels daily. 

• 2022: $3.50 per gallon – fuel Consumption: 9.60 million barrels daily. 

• 2021: $3.00 per gallon – fuel Consumption: 9.40 million barrels daily. 

• 2020: $2.50 per gallon – fuel consumption: 8.90 million barrels daily. 

• 2019: $2.60 per gallon – fuel consumption: 9.60 million barrels daily. 

• 2018: $2.80 per gallon – fuel consumption: 9.50 million barrels daily. 

These numbers tend to highlight the inelastic demand for fuel in the trucking industry. What's more, it demonstrates that even considerable price hikes do not drastically affect fuel usage. 

Let’s understand how the rising fuel cost has affected the trucking industry. Keep reading! 

1. The trickle-down effect

Not only will trucking costs rise, but so will all other costs. Between 2023 and 2024, an increase of 3.1% was noted by the Consumer Price Index. To point out, in early December 2024, important crude oil cost benchmarks like Brent crude oil were close to $70/barrel.  

These shifts in oil prices directly lasting results transportation costs, new to corresponding increases in the prices of goods transported by these vehicles.

1. Fuel efficiency and rolling resistance

With gas prices rising, investing in fuel-productivity-chiefly improved trucks and progressing existing trucks to improve fuel efficiency is becoming more cost-effective. Rolling resistance is something that many owners and operators miss, but it can have a important lasting results on efficiency. 

 In a word, rolling resistance is the drag that your tires cause on the road. This resistance refuses to let your truck, automobile, or bicycle advance, requiring a certain level of strength to overcome it.  

Car and truck tires are constructed of flexible rubber, which flattens when it meets the road. The rubber lets it grip the road and keeps you ahead. When the surface exits the road, the tire returns to its circular shape. Old or inadequately filled tires resist this flexing movement, requiring more energy — and so if you really think about it more gasoline — to advance your tires forward. 

To make matters more complex, reducing speed, improving cabin aerodynamics, and reducing payload contribute to improved fuel economy and lower when you really think about it fuel expenditures.

1. Capacity is being lowered

As carriers attempt to reduce empty miles to conserve fuel, shippers with freight in rural areas or where diesel fuel prices are higher than the national average may see their acceptance rates fall. 

 Carriers are becoming much more selective about their load (choice), being extremely cautious about running too far from the next load, and so, they are becoming more aware of pricing their loads into those markets to compensate for the assets’ repositioning to another load point. 

1. Unreliable and quickly progressing pricing power

Shippers report that prices have begun to normalize and that load acceptance rates have climbed in recent months. One possible explanation for this could be the lasting results of the Ukraine crisis on the global freight industry. Retail sales dropped by over 4% in March, showing that demand has weakened. So, customers are reducing their travel and service spending. 

In the end! 

The industrial area has borne the brunt of the rise in fuel prices, particularly new-to-market owner-operators who purchased used vehicles at record-high prices. They will have to put their cars up for auction. Some may return to their former positions as truckload carriers, although others will leave the industry entirely. 

Market experts believe that the market’s volatility in recent years, as well as the lasting results of high fuel prices, will give useful lessons eventually. To keep drivers, fleets are boosting their pay. Although gasoline prices will eventually level out, driver salaries and other expenses will remain high, and these costs must be considered when predicting rates.