A surge in the price of diesel is prompting some truckers to stop driving, adding one more ripple to the country’s supply chain challenges.
The price of diesel at the pump is now above $6 per gallon, up by more than $2 from where it was in early 2021.
That increase means that what used to cost around $400 to fill up a semi-truck may now be at or above $1,000, notes news sources.
According to the latest available statistics from the American Automobile Association, the price of diesel is somewhat lower in New Mexico at around $4 per gallon, while Colorado is seeing prices just below the $4 mark.
Trucks use up around 36.5 billion gallons of diesel annually, notes the American Trucking Association. While many trucking companies can absorb the rising diesel costs via fuel surcharges written into contracts, that’s not always the case with independent owner-operators.
Such drivers “make up the bulk of the highly fragmented truck market,” notes the Wall Street Journal, and are having an increasingly harder time “passing along the added expenses.”
The rise in diesel, notes the Washington Examiner, risks forcing many of the smaller operators to quit, “during a time when labor shortages in the industry are already wreaking havoc on the global supply chain, which has struggled to keep pace with demand since the start of the Covid 19 pandemic.”
And a decrease of any trucking operation, notes Craig Fuller, could have a negative impact on any number of industries, simply because trucking is a part of so many industries.
“Roughly 850,000 diesel-powered vehicles nationwide are in use bringing supplies, materials, and workers to and from U.S. construction sites,” adds Fuller, chief executive officer of FreightWaves, a trucking industry analysis service.
Industry experts say that a decline in supply is particularly causing problems.
Notes the publication Business Insider: “Some refineries were shut down when demand was lower, meaning that even when oil companies pump more crude, the remaining refineries can’t churn out more diesel at the same pace.”
By Garry Boulard
