Diesel Prices Skyrocket 58%

diesel prices

You can’t turn on the news without hearing stories about rising prices. Part of the reason for the sharp increase in the cost of goods is skyrocketing diesel prices. As everyone in the trucking industry knows, when the cost of transporting goods goes up, the price of goods goes up.

However, trucking operators can’t always pass the entire cost of higher fuel prices on to customers. This means trucking operations must find ways to save money on other essential purchases, such as truck insurance.

Trucking Companies Taking a Hard Hit With Diesel Prices

In February of 2022, the price of diesel was up 57.5% over the previous year and with the war in Ukraine, diesel prices continue to climb. According to industry experts, prices will continue to increase before they start normalizing again. Researchers expect the rising cost of fuel to have wide-ranging effects, including delaying the start or completion of infrastructure projects and continuing to contribute to the rising cost of materials and finished products.

8 Ways the Trucking Industry Can Reduce Costs

While you can pass some of the high price of fuel on to the shipper, to stay profitable, trucking companies must find ways to reduce expenses. Consider these strategies when creating your expense reduction plan.

1. Keep Track of Your Budget

If you only track your expenses at the end of the year, you may be missing out on opportunities to reduce costs. Your expenses can shift dramatically from week to week based on changing prices and the decisions you make. As a result, it is important to track your spending weekly and review your budget at least once per month. If your profit margins are dropping, look for overhead costs, such as truck insurance, you can reduce.

2. Outsource Administrative Functions

Many small trucking companies can save money by focusing their efforts on the parts of their businesses that they have the most expertise in. Outsourcing administrative tasks, such as payroll, billing, human resources, and truck insurance frees up staff to focus on trucking operations. Third-party services that specialize in handling these functions can often complete them more efficiently and save you money compared to hiring full-time staff.

3. Emphasize Safety

Some trucking companies cut corners to save money on implementing safety standards. However, this approach can cost you money in the long run. Trucking companies that don’t have a zero-tolerance policy for accidents and injuries risk not only more injuries to their drivers and other employees but more third-party injuries and deaths caused by trucking accidents. Poor safety standards contribute to higher costs for workers’ compensation claims, reduced productivity, increases in transport times and rising liability costs and insurance premiums.

4. Make Smart Fuel Choices

You may consider switching to lower-quality fuel to save money. However, while this strategy may save money in the short term, it may cost you money long term. Lower quality fuels can cause deposits in the injectors, combustion chamber and valves of your trucks that reduce engine performance and cause early part failures. This can lead to an increase in the cost of maintaining, repairing, and replacing your fleet. Instead of switching to lower-cost fuel, implement fuel conservation strategies, such as regularly inspecting and maintaining your fleet and training drivers on good driving habits.

5. Plan Efficient Routes

It is easy for fleet managers to fall into the habit of using only main routes to delivery locations. Alternative routes often have less traffic than main routes. This reduces the amount of time that trucks spend idling and the opportunities for accidents to occur. You may be able to save money on fuel, complete deliveries faster and reduce wear and tear on your fleet by utilizing more efficient alternative routes. If you need help choosing the best routes, consider using route optimizing apps.

6. Educate Dispatchers

Many trucking companies promote drivers who do not have managerial experience into dispatch roles. These dispatchers often focus too heavily on setting goals based on total mileage instead of billable-mileage. Drivers attempting to meet these goals may choose less efficient routes. Encouraging drivers to focus on billable efficiency, instead of raw mileage, can improve profit margins.

7. Help Drivers Stay Healthy

Long hours on the road in areas with few healthy food choices can lead to poor eating habits and not enough rest. Drivers who eat a poor diet and don’t get enough sleep are more likely to suffer from fatigue and burnout which can lead to an increase in accidents. Incentivize your drivers to get an adequate amount of rest and find ways to encourage healthy habits, such as implementing a rewards program or purchasing apps they can use to locate healthy places to eat on their routes.

8. Cut Down on Idle Time

Trucks don’t earn you any money when they are sitting idle, but they continue to burn fuel and wear down engines. Idling cannot be completely eliminated, but you can reduce the amount of time trucks are idle by encouraging drivers not to leave their trucks running when they stop for deliveries or roadside breaks and avoiding heavy traffic areas and construction zones when possible. A good rule of thumb is to turn off the engine whenever the truck will be idle for 10 seconds or longer. This is the point where it uses less fuel and creates less wear and tear to restart the vehicle rather than to allow it to run idle.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!