Fuel Prices and the Supply Chain
Let’s face the fact that if fuel prices continue to rise the supply chain issues are going to continue to worsen. As it is if you are a small one to five truck fleet trucking company it’s a real struggle to profit after you pay for fuel, pay your drivers, and do standard maintenance on the trucks. After those things are finished the owner of the truck really doesn’t have much left to take home to their family. I know this as a fact because my husband and I own a small trucking company in Alabama. When fuel prices began to rise it wasn’t too bad; we could make it work but that didn’t last. As the fuel price began its steep and steady climb I saw that fuel was going up and pay on the loads we took was going up as well but not at the same rate as the fuel price was rising. The steep rise in the fuel prices has been so incredibly steep that no amount of pay offered by brokers has been able to keep up. On top of that our customers were in the same position that we were. Everyone is facing a real struggle to make any profit.
Another contributing factor has been the ability to get and keep employees. The lockdowns seem to have produced an almost phobic response from the American workforce. Getting and keeping drivers, no matter what you pay them, has become a real task. I’m not sure if it was the lockdowns or the unemployment checks that have caused the issue but finding drivers that are willing to stay in a truck and work a decent day’s work is almost impossible. If a truck is not rolling it is not profiting anyone.
When it comes down to it a company has to pay for the truck and drivers first. The driver’s pay, fuel bills, truck payments, and maintenance costs must come first and the company/owner gets what is left. That has gotten to the point it is only about one-quarter of what it was coming out of the pandemic. The pandemic did not seem to slow down our small company as we delivered PPE. That work has been depleted and there's not much of it left to do anymore.
Maintenance is also becoming harder and harder to do on the trucks as well. Truck parts are getting harder to find, oil for oil changes is astronomical, and tire prices are going up what seems like daily. An oil change for a semi-truck at the end of the Trump administration cost less than half of what it costs today. Finding the oil has become an issue. Finding the filters has even become a challenge at times. When you add in IFTA which must be filed every quarter and the yearly cost for a truck’s registration and cab card (tag) the margin of profit for any small company is very little.
Small trucking companies around the country are closing and their trucks make up a large part of the supply chain. We went from four trucks to having to sell and are now down to two. My husband was planning to be at home and not drive a truck as much is having to rethink that completely. As it is I have no idea if he will get to come off the road in the next few years. I honestly don’t see us being in the business in a year or two.
By the end of the Biden administration, my prediction is over half of the small trucking companies will have closed their doors completely. I would almost guarantee it as it seems we are heading into a recession. I know that 90% of the freight my small fleet hauls is lumber. A recession means a major decline in homes getting built. That means less lumber is sold. I know that if there is a recession it will be a miracle if we don’t have to file bankruptcy and close the doors. As it is, I have started to look for another job. I have run the office part of the company for years. Now I’ll have to try to do that on top of any second job I can find. I’m not sure it’s possible but I plan to try.
In conclusion, the economy has been hit hard by the pandemic and is now being hit in some ways harder by inflation. The supply chain is in a terrible mess and does not look to be getting better any time in the near future. Shortages of certain goods, such as formula and feminine products, have already started to cause problems in our country. I never thought I would see a time that we, as Americans, would see this happen here. I thought those types of problems were from stories my parents and grandparents would tell me from them growing up. These are the types of things that happen in other countries but not here in America. I honestly cannot say any of these things will get better anytime soon. I will put this bluntly if the trucks stop because of fuel prices or stop for any reason then this country stops. Any time you make a purchase there’s been a truck involved. They deliver everything in this country. I would say unless you make it yourself then anything you own has been on a truck of some type at least one time before reaching the store or market where you purchased it. I truly wish I could see the silver lining in the current situation that Americans are facing but right now it just looks to be a washed-out tattered gray lining that needs to be hemmed.
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L.S. Hopson