The price of diesel fuel will play a heightened role in transportation rates in the next couple of years. Fuel costs are always an important indicator of over-the-road (OTR) shipping costs, but a perfect storm of events will make diesel prices more important than ever before.
As of June 2016, diesel fuel is $2.382 per gallon on average –a high for the year. Fuel prices are expected to rise for the rest of 2016 and throughout 2017. Under normal circumstances, this would lead to rate increases due to higher fuel surcharges, but the next few years in the freight industry are far from normal, and a few different outcomes are possible.
Obstacles in Transportation
To see the impact of diesel prices on transportation rates, it’s first important to understand the many challenges facing OTR carriers. These obstacles all affect efficiency and profitability for trucking companies, consequently affecting rates.