Average diesel prices have climbed from $2.39 per gallon in October to $3.15 in March.Max Heine
Four concerns about 2021 stood out for owners of one to nine trucks, with carrier authority, in a recent Overdrive survey: driver availability, fuel costs, regulation and the political climate in Washington, D.C. When it comes to the dollars and cents of operational costs, fuel again stands out as the item expected to rise the most this year.
Of the many operating cost increases expected this year other than fuel and liability insurance, no single item was chosen by more than 4% of small-fleet respondents to an Overdrive survey in February. Two-thirds of respondents were for-hire carriers. Most of the others were private fleets.
“Fuel prices up 25% already and no signs of flattening out,” wrote one respondent. “That will for sure affect freight rates, and increased freight rates added to soaring materials prices will be throwing the brakes on the economy fast.”
Asked to rate company expenses that increased the most on a percentage basis from 2019 to 2020, 8% to 10% of respondents listed healthcare, driver pay, fuel or truck parts.
Retail diesel prices, as tracked by the U.S. Department of Energy, have staged a strong rebound, exceeding levels of months just before the pandemic took hold.
Depressed fuel pricing for much of 2020 was a windfall for operators in niches that remained healthy. Average fuel costs per mile for the thousands of owner-operator clients of financial services provider ATBS dropped 25% from 2019 to 2020, from 46 cents to 34 cents, yielding a year in which overall revenue declined yet income was up significantly. Decreased traffic with a boost in average fuel mileage during the pandemic, ATBS said, is also considered to have contributed to lower operating costs.
[Related: What are your chief worries (or hopes for) Biden admin. over 2021?]
Other responses included maintenance costs, cash flow, equipment costs, labor costs and taxes. These responses are based on operators with their own authority and running less than 10 trucks. The poll was sent to a broader range of readers of Overdrive and sister publication Commercial Carrier Journal.
However, most sources in published analyses of whether the Keystone decision is immediately driving up fuel prices conclude there is no connection. A Forbes article, for example, notes that pipeline completion was years away and prices were rising before Biden’s action. Writing for Forbes, Robert Rapier said “the Keystone XL volumes and the timeframe of the pipeline’s completion are tiny variables compared to OPEC production decisions and an economy recovering from the Covid-19 pandemic.”
Similar conclusions were put forth by The Poynter Institute’s Politifact research arm, among other sources.
