These days, there's an apparent glut in the diesel market, meaning there's more diesel available than there is demand for it. That's good news for flatbed transportation companies, and indeed the the entire transportation industry. With diesel prices running 28 percent less than a year ago, there are certainly benefits to be reaped. But, just how are lower diesel fuel costs going to affect the trucking industry now and into the foreseeable future?
Lower Operational Costs
Clearly, lower fuel prices means that it costs less money to keep trucks rolling down the road, but just how much less? The average commercial truck uses 20,500 gallons of fuel over the course of a year. At last August's prices of right around $3.85 a gallon, that would come to $78, 925. This year, however, with an average price of $2.77, that same volume of fuel will only cost $56,785. That's a substantial savings, especially when you take into consideration that fuel is one of the largest expenses for trucking companies, constituting at least 39 percent of the costs.
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Expedient delivery of goods outweighed the cost differential. However, since intermodel transportation pricing is governed by fixed costs, such as terminal expenses, not fuel costs, shipping costs will remain higher in this area. Now, lower fuel costs will further help to increase the use of trucks, rather than rail for transportation. This type of shift has not been seen in the industry since 2010, but it appears the trend will continue for the foreseeable future.
Fuel
The 2016 Chevrolet Colorado, is now being offered with a diesel engine. This is the Duramax four cylinder, 2.8 liter. Chevrolet insists that this is the cleanest car they have ever produced. They have gone the extra mile to reduce nitrogen oxide emissions as well. GM has stepped up their game, not just with this truck, but with the GMC Canyon, that is almost exactly like the Colorado. The Canyon and Colorado have pumped life into a dormant market (mid sized truck). So much so, that truck buyers are buying this, rather than a bigger, full size truck they normally would have bought.
market. This suggests that the company is highly influenced by the condition of the U.S. economy. UPS is currently in a strong position in terms of increasing shipping volumes (directly affecting the domestic segment) as a result of the improving economic climate and increase in consumer spending. Although the U.S. economy is progressing, consumers remain weary and tend to limit their spending and prefer lower-cost alternatives. The price of raw materials is also a significant factor. Oil prices in particular are highly volatile and a number of external factors such as foreign exchange fluctuations, foreign policy agendas, and supply and demand levels from emerging markets all affect dramatic price changes. The U.S. Energy Information Administration estimates 2016 fuel prices will decrease from the previous year, to a predicted price per gallon of $2.38 (Investopedia). As companies like UPS take initiatives to cut costs and maintain efficiency, profit margins have increased from 11.9% in 2011 to an estimated 13.5% in 2016. This increase is a result of implementations such as UPS’s Worldport expansion of utilizing more “fuel-efficient aircrafts to help lower operating costs” (IBIS). With the increase use of e-commerce platforms, U.S. consumers have access to more information than ever before—allowing them to make more informed purchase decisions. Technology has allowed
When it comes to the environmental impact that gas and diesel engines have. It turns out that gasoline is more unstable than diesel, not because of what its base consists of, but because of the additives it contains. In addition, vehicles that use diesel tend to be more fuel-efficient and produce less greenhouse gases. Diesel is more environmentally friendly. The United States has what is considered to be the dirtiest diesel, but as of June 1, 2010 this is going to be different. U.S. diesel fuel has a lower measure of ignition quality. This means that when it is cold outside, ignition performance is poor and can result in higher emissions. This is why you see truck drivers idling their trucks all night long in cold weather rather than risk a troublesome start in the mornings. But, the sulfur in the diesel that is emitted during cold ignitions and long engine idling is still harmful to the environment because the sulfurs prevent the control of diesel particulate emissions through diesel particulate filters. This is changing, though, since new advanced technologies such as nitrogen oxide absorbers are being developed to reduce these emissions. As for gasoline, it is the non-aliphatic hydrocarbons as well as carcinogenic additives
The current sources of fuel for gasoline and diesel vehicles are limited to gasoline, diesel, and biodiesel fuel. As of October 18, 2010, the average price for regular grade gasoline was $2.834 per gallon while the average price for diesel was $3.07 per gallon. Only the biodiesel fuel labeled B2, B5, and B20 can be used in a standard diesel vehicle without engine modifications. The average for B20 fuel mirrors the price of standard diesel fuel at $3.07 per gallon.
1. Have you ever wondered how the things you buy get delivered to the stores? Semis, planes, trains, and sometimes boats. The majority of them run on diesel, because diesel is more efficient than a gasoline engine. With the number of diesels on the road everyday there is a high demand for mechanics that are properly trained to work on them. You have to be able to leave home on a moment’s notice to travel and repair trucks on the road. Being a diesel mechanic is very stressful and you never know what you will be working on day to day.
Our Trucking companies have not only survived the high costs of heavy highway taxes such as, IFTA, IRP, and other taxes like, vehicle registration cost, escalating fuel prices, and skyrocketing insurance premiums. These high operating costs place enough of a burden on small businesses. This does not include tolls, vehicle and trailer maintenance, and payroll. To deal with these rising costs we had to reduce the size of our fleet and personnel.
Diesel mechanics has a pretty large job growth outlook. The job outlook of diesel mechanics is 12% in the next 10 years (U.S. Bureau of Labor Statistics). Diesel mechanics are needed because of more freight. Diesel trucks are being used more and more so more diesel mechanics will be needed (U.S. Bureau of Labor Statistics). As more semis are being driven so freight can get destinations faster diesel mechanics are needed so they can work on the semis and keep them
I am a husband and a father of four lovely children. We need a large vehicle to haul all of us around town. And of course I would do anything to keep them safe and I always want to provide them with the best. Therefore, after the birth of our fourth child two and a half years ago, my wife and I decided to upgrade our Ford Explorer to a Ford Expedition. We got everything from the side-curtain airbags to the TV and DVD player. What we did not know was we also purchased a rather large unleaded gas bill. The first time we filled the tank it cost us roughly $35; today it costs us right around $75 to fill the tank. Obviously the price of gas has increased significantly in the last two years. The price
Drivers realize that the price of gas is tied to the market value of crude oil, and has a direct impact to their daily commutes, errands, and vacations. However the reality is that the price of fuel has implications much grater than most consumers realize. Fuel prices affect nearly everything we purchase. For example, the price of farm commodities and food increase because farmers pay more for the fuel for their farm equipment and trucking firms pay more for fuel to get the commodities to market. These shipping “fuel surcharges” impact all goods
Most people think of a truck as a large beefy vehicle, but not many people realize that there are different advantages to different trucks. A gas burner truck and a diesel truck are both trucks, and can both be used for hauling equipment. Both types of trucks can be great daily drivers, but one may be more efficient than the other in a specific criteria. Although a gas burner truck and a diesel truck are both types of trucks, they have several differences in performance, durability, and maintenance.
The combination of all these things compiled the cost of diesel, spells out higher overall costs for every single trucking company in the industry. The growth of the freight industry and superior efficiency of railroads will lead to an even slower growth rate for the trucking industry and could be a cause for more concern as the trend continues.
Because diesel fuel is easier to refine, taking less time to get from raw petroleum to final product than gasoline, it's usually priced lower than gas. However, occasionally in the U.S., diesel is priced the same or more than regular unleaded gas. This is often because diesel isn't as desirable in some areas leading to higher diesel prices. However, diesel advocates say that if more people drove diesel light trucks and cars, the price would drop dramatically in these areas--and possibly throughout the
Across the nation, the average person uses at least 400 gallons of gasoline per year, or about 8,000 miles on an average car. At $4 per gallon, that is a hefty $133 per month for each family vehicle to run the errands that are part of each family 's life.
Now while diesel prices have averaged 14 percent more per gallon than gasoline over that last decade (Staff @ WorkTruckOnline, 2011), there is an equalizer in this whole situation. The diesel’s fuel economy advantage over the gasoline powered version actually balances out the cost of the two fuels with each’s relative fuel economy. A diesel vehicle emits more greenhouse gas emissions when burnt than gasoline, but its higher energy content per gallon results in higher fuel efficiency for the vehicle. So, as a result, the diesel can go further on a single gallon than a gasoline truck, meaning it produces very similar greenhouse gas emissions as the gasoline powered engine, while running nearly the same cost for fuel per mile as a gasoline powered
Growing up with a father who has worked as a truck driver for almost all of his life, I have witnessed firsthand the role that the trucking industry plays in the economic vitality of Tennessee. When I was younger, I could not understand why my father would be gone for extended periods of time or why he had such an irregular schedule; however, I now see why my father did what he had to do. Without trucking industry workers, such as my father, our state could not operate. People rely on transportation laborers to supply the goods that they need and desire. Without this industry, the lives of all would be impacted greatly. There would be no one to deliver food, resulting in scarcity. There would be no way for essential supplies and materials to