Rising diesel costs are eating into U.S. transport company budgets, according to Tech.co’s recent survey.
In fact, over half (52%) of U.S. transport and shipping companies spend 20% or more of their monthly operating budget on fuel costs, as diesel prices surge.
"As the rising costs of vehicle maintenance and critical driver shortages present difficult, daily challenges for logistics companies, this surge in oil prices will only compound the financial pressure felt by businesses in an industry running on empty,” Tech.co’s content manager Aaron Drapkin says. “Being forced to swallow higher and higher fuel costs just to keep vehicles on the road means companies can’t put money aside to invest in the kind of technology that will actually help them bring down costs in the long run, such as route optimization software and fuel reduction solutions.
These are exactly the kind of investments that help companies weather periods of economic volatility, such as the one we currently find ourselves in, exacerbated by uncertainty around tariffs.
The strain on monthly operating budgets will mean less money and time for long-term planning, as immediate financial pressures take priority at transport firms. If fuel prices continue to rise, it’s likely to have a knock-on effect across the supply chain. Logistics companies will be unable to expand to meet the ever-increasing freight demand, which is ensuring the vast majority of them are already working at near-full capacity anyway."
Key takeaways:
- 20% of U.S. transport and shipping firms say rising diesel prices is the issue hitting their business hardest.
- 17% of U.S. transport and shipping firms say managing financial pressures is their main priority.
- Of the 52% of respondents spending at least 20% or more of their operating budget on rising fuel costs, 24% of respondents spend 20-29% of their operating budget on fuel; 16% of respondents spend 30-39% of their operating budget on fuel; and 12% of respondents spend 40%-plus of their operating budget on fuel.
- 20% said rising diesel prices is the issue currently hitting their businesses the hardest.
- Tech.co’s logistic industry tracker reveals that this is the highest percentage for this sentiment over the last 3 months, marking a three-month peak in fuel price concern.
- Managing financial pressures is now the second-highest priority among U.S. transport and shipping firms, with 17% of professionals in this industry highlighting this as their main priority.
- The fact that the majority of U.S. transport and shipping companies are having to cut into their operational budgets to afford rising fuel costs shows how great an economic impact soaring fuel prices are having on U.S. transport and shipping businesses.
- Biggest problems faced by US transport and shipping firms are vehicle upkeep: 20%; managing financial pressures: 17%; adopting new technology: 15%; and staffing retention and recruitment: 14%.
- Despite a critical staffing crisis within the U.S. transport and logistics industry, financial pressures have overtaken concerns around labor shortages.
