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Companies are continuing to warn against the diesel fuel shortage and how it will affect the trucking industry moving forward.
South Carolina Trucking Association CEO Rick Todd recently spoke about the problems facing trucking businesses and the reasons behind the fuel shortage, as well as high costs.
“Truckers are feeling the hurt right now. Supply chain challenges just keep coming,” he said on Fox News, adding that truckers often essentially pay cash for gas and don’t get paid for several weeks or more.
Todd also advocated for a more gradual approach to integrating new technology.
“We should … as a country take a longer-term view, do everything we can, put everything on the table,” Todd said. “But in the meantime, stick with what works until you can replace it, and then make sure that when you do replace it, that it’s scalable.”
“Nobody wants to be force-fed any alternative technologies or anything until they’re done,” he added. “So I think we put ourselves in this situation unnecessarily.”
A few weeks ago, numbers were released that revealed the country has 25 days of diesel reserves, leading to high delivery costs this month. However, as diesel production is expected to continue, the U.S. is not projected to run out despite having limited supply.
The costs are up nearly 40% for the month of November. The smaller companies are the ones who will feel the pain the most.
“There’s no way any company can absorb cost increases like this, and any business that can’t pass on their costs isn’t going to stay in business for very long,” Todd said. “The larger fleets are a little bit better positioned to deal with these kind[s] of conditions, but the smaller fleets … 91% of the nation’s truck fleet, these companies have six or fewer trucks.”
“So we’re really talking about Main Street-type businesses, and it’s a huge strain on them to be able to keep up with these costs,” he continued. “They try to pass them on, but rarely are they able to do it 100%.”
Fuel supply business Mansfield Energy recently said the northeastern and southeastern areas of the United States will see shortage of diesel fuel, The Daily Wire previously reported.
He said the diesel shortage is “a combination of bad policies,” but added that a lot of factors have been outside of their control, as well.
In addition, oil costs could get up to $100 this year and be more than $120 in trading in 2023, a leading analyst Amrita Sen of Energy Aspects noted, per Business Insider.
“We are expecting [oil] prices to go towards $100 into the year end, and really trade into the $110s and $120s for most of next year,” Sen told Bloomberg earlier this week.
However, the diesel shortage is a bigger problem.
“We just haven’t built [diesel supplies] over the summer,” Sen said. “And that’s what we tend to use in the winter if it does get very, very cold.”