Rising Oil Prices and The Trucking Industry
It’s something that no one wants to hear: gas prices are rising. Perhaps you’re fixing that tire on your bike or gearing up to buy yourself an electric car. But rising oil prices are affecting more than just your daily commute to work. For people in the trucking industry, almost their entire job is driving. That means that as the price of driving goes up, their expenses rise as well. The cause and effect of rising oil prices and the trucking industry conditions for drivers on the road is a serious issue.
The Cost of Gas
In 1960, gas was $0.31 per gallon. That price probably sounds like music to your ears (and wallets.) If you account for inflation, that’s about $2.50 in today’s dollars. This still probably sounds like music to your ears.
In 2018, oil is selling for $68.64 per barrel. The average gas station charges $3 per a gallon of gas. That doesn’t seem like such a huge hike from $2.50… The average gas price in California is $3.73, and prices are only rising.
The typical big rig uses about 20,000 gallons of fuel each year. The average price of fuel at around three dollars per gallon! That works out to more than $60,000 yearly in just fuel prices alone for trucker’s expenses.
Rising Oil Prices and The Trucking Industry Changes
As gas prices continue to skyrocket and don’t show any sign of going down, those in the trucking industry will have to adapt to survive. Trucking routes may have to change to adapt to the cost of traveling long distances. More strategic driving alternatives could help alleviate some of the high cost.
It’s also likely that trucks will start to be made to be much more fuel efficient. Expect to see electric trucks and big rigs, or ones made with alternative forms of fuel in the coming years.
Keeping truck tires properly inflated can also help increase fuel efficiency. Tires that aren’t inflated correctly or are too old take more energy to move forward. Truckloads also may have to be reduced in order to improve fuel economy.
Aside from the fuel price issue, the trucking industry is also facing other issues. The demands for drivers are higher than the number of drivers available. Those who have worked in the industry their entire lives are beginning to retire, and younger people aren’t taking their place.
Owners of fleets are also experiencing high turnover rates, having to replace their drivers every few years or more. The job simply isn’t attracting people. For the industry to continue, fleet owners will have to draw in drivers with higher pay and better benefits. This is another increased cost in addition to fuel prices.
Companies need to find out a way to keep up with rising fuel prices and decreased desire to enter the industry if they’re going to be able to stay afloat.
The Impact
About 75% of the goods sold across America are all transported by truck. The goods that you enjoy each and every day were likely shipped to you from a big rig or fleet vehicle.
This means, plain and simple, that everything you buy is about to get more expensive. When gas prices rise, other general products go up in price as well to accommodate for the increase. There is a direct link between rising oil prices and the trucking industry beginning to feel the stress.
In 2010, when a barrel was $89, the price of beef and corn almost doubled. As prices of gas increase now, these products are again expected to climb.Do you need trucking equipment but are afraid you can’t afford it? You can afford it, no doubt about it.
TopMark Funding will get you the vehicle financing you need at the best rates, so you can continue to compete in the industry even with ever-changing prices.
