Rising diesel costs are eating into freight company budgets, as 52% of U.S. transport and shipping companies now spend 20% or more of their monthly operating budget on fuel costs, according to a report from Nevada-based technology consulting firm Tech.co.
And some of those companies spend even more. The study found that: 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%+ of their operating budget on fuel.
Of the 264 transport and shipping professionals surveyed in July by Tech.co, 20% said rising diesel prices is the issue currently hitting their businesses the hardest. That was higher than the rates of 16% in June and 13% in May, marking a three-month peak in fuel price concern.
Overall, the researchers found that the biggest problems faced by U.S. transport and shipping firms are:
1. Vehicle upkeep: 20%
2. Managing financial pressures: 17%
3. Adopting new technology: 15%
4. Staffing retention & recruitment: 14%
According to Tech.co’s Content Manager, Aaron Drapkin, that ranking shows that financial pressures have now overtaken concerns around labor shortages.
“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,” Drapkin said.
“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,” he said.
