When it comes to cost of operations, the cost of diesel is at or near the top of any trucking business. Land Line monitors weekly fuel reports from ProMiles.com, the Energy Information Administration and AAA. The ProMiles.com data is updated every weekday, the EIA and AAA data is updated weekly as their reports become available.
ProMiles.com
Click here to view ProMiles fuel data averaged by state.
EIA report
AAA report
The highest recorded retail average U.S. diesel price was $5.816 per gallon on June 19, 2022, according to AAA.
Diesel prices and their toll on the cost of trucking operations
The cost of operations for your trucking business is made up of fixed and variable costs. Understanding the difference and being able to quote appropriate freight rates, or better yet, turn down insanely low rates, is critical to the success of your trucking business.
Fixed costs are just that “fixed.” They are the expenses your trucking company has just for having a truck parked in your driveway. These costs are there whether you turn your truck on or not. There are those holidays where a lot of truckers will just accept those fixed costs and stay home. But what about days when it might be better to sit and wait on a better-paying load of freight?
Those variable costs come into play when you are making decisions on rates. Diesel tops that list of variable costs. Followed up by tires, maintenance, repairs, etc. Generally speaking, the more you run, the more your variable costs go up for your trucking business.
The Owner-Operator Independent Drivers Association recommends truckers keep a fuel ledger. Since fuel is your largest variable cost, small changes can have significant results. Making a change in your driving or equipment that adds as little as two-tenths of a mile more travel per gallon of fuel (i.e. 5.7 instead of 5.5 mpg) can translate into more than $2,000 in annual savings. Fine-tuning every cost in a trucking operation can make a significant difference in its profitability.
Incorporating a fuel surcharge
It’s critical that owner-operators understand the importance of utilizing a fuel surcharge, especially when the market is volatile. The OOIDA Foundation has produced the video below to explain how to incorporate it with your business. The Foundation has also made a fuel surcharge calculator available online.
