Fuel Isn't the Only Increase
Ask any trucker about anything today, and the conversation quickly turns to the rising cost of diesel fuel. It should be no surprise, given fuel is one of the largest expenses to keep a truck running down the road and delivering the products consumers need.
This current spike in fuel costs elevated quickly, but it was not (or shouldn’t have been) a surprise to anyone in the trucking industry. We all saw it coming, even if many are now outraged at the high cost that they should have been preparing for over the previous months.
If you own and/or operate trucks, you have to pass these and any rising costs to operate along to your customers. This is just a fact of supply and demand. You simply cannot continue to operate when you charge less than the cost to operate, this includes rising fuel costs, increased maintenance costs as well as driver pay. The last last one is maybe the most critical, driver pay. Once the truck is parked for the day or the week, a driver becomes a consumer. The added cost passed along to your customers will, in turn, get passed along to their customers. The end result being the goods available will cost more.
Don’t just assume you need more fuel money to drive the truck. When you finish your trip, you also need more payday left for the driver to live on, outside of the truck.
The additional fuel surcharges definitely help with fuel costs, but an increase to the base RPM (Rate Per Mile) is also needed to maintain a profit above the fuel costs.
So we know the issue, what can we do about it? First and foremost, customer negotiations are needed to agree on an overall increase in pay. A candid conversation with those who value your services and wish to maintain the relationship going forward. Customers feel the pinch of rising costs just as you do, if they value your service, they will acquiesce to common ground that suits both parties and keeps the goods moving.
Secondly, it is up to you, the driver, the owner or the owner/operator to maximize their MPGs. Maybe you drive a little slower to conserve fuel. Maybe you add aero devices to increase the truck’s MPG. Perhaps you simply get out of your rut and really shop fuel stop prices. Buy the best value, not just go where you have always gone, just because that was where you always bought fuel and DEF. Fuel where you get the best price. And DEF, the pump DEF is convenient, but boxed DEF can be a better deal if you plan ahead. Boxed DEF not your thing? No worries, you can still find better DEF prices at places other than the big 3 truck stop chains. Yes, it does mean an extra stop just for DEF, but if you truly want more revenue in your bank account after expenses, a small effort to shop and plan for the additional bathroom/ rest break/ DEF purchase will pay off in the end.
This current spike in fuel costs is being touted as the highest ever, and it is, but it is not the first time transportation costs have spiked and it will not be the last. If you are reacting to the current fuel price jump, it means you didn’t properly prepare for it. Harsh words, but a fact. I speak from experience. Decades ago, when I first started in the industry, I was caught off by a similar spike in fuel costs. I survived it and learned to plan for the next one. Owner operators need to plan ahead and watch your numbers. You can survive being caught off guard, but prepare for the next one, everything runs in cycles… everything. This will pass, but it will come again.
Intelligence is the ability to adapt to change.
- Stephen Hawking
See you down the road,
Greg