JOPLIN, MO — FEBRUARY 7, 2023 — A year’s worth of persistently high inflation has taken its toll on trucking operators, particularly those in the irregular route, long-haul full truckload segment. Over the past year, fleet operators have been battling through a perfect storm where soft demand has driven down rates and curtailed volumes, while stubborn inflation has raised the costs of everything from driver pay to health care to tires and parts to rents.
Then there’s the inflationary spiral that’s spiked the cost of diesel fuel. And while many truckload contracts do have some contract provisions for fuel surcharges, they don’t keep up with the speed and scale of increases seen in the past year. The nature of the global oil market has far-reaching effects, influenced by governments, industries, global political events, overall demand, and a host of other factors. All of which have conspired to keep fuel costs at record levels – and a constant drain on truckers' expense statements.
In this third of a four-part series, titled “Oil and Inflation,” CFI President Greg Orr discusses how the oil markets and the roller coaster behavior of supply and price ripple through every aspect of trucking, as well as the daily lives of consumers. And how truckers and their customers can employ collaborative strategies to minimize the impact of energy inflation to keep freight cost increases to a minimum, drive efficiencies in operations, and ensure sustainable, reliable capacity.
“Fleets operating at a loss or with margins insufficient to recapitalize the business aren’t going to be sustainable sources of capacity for very long,” Orr notes. “Shippers see costs rising across the board in their businesses and with their products. They should not be surprised when fleets, facing similar pressures with rising costs, are resistant to requests for rate reductions. We’d rather work with customers to define the true cost of providing service to them, find the sweet spot between price and reliable capacity, and work forward from there.”
The four installments in the series are:
• Capital & Capacity (released January 24)
• Fluctuations & Normalcy (released January 31)
• Oil & Inflation (released February 7)
• Relationships & Stability (Scheduled for February 14)
The final video explores the carrier and shipper relationship. The best players are successful at developing trusted, strong relationships that endure through any market by valuing stability with a business partner.
The last chapter in the series will drop on Tuesday, February 14. Go to the CFI newsroom, learn.cfidrive.com to follow along.
ABOUT CFI – CFI is a multifaceted carrier with a balance of asset and non-asset services driving supply chain solutions for businesses across North America. A wholly owned operating company of Heartland Express, Inc. (NASDAQ: HTLD), CFI’s portfolio includes asset-based Truckload and Temp-Control services as well as non-asset-based Mexico services. A staple of shippers, CFI delivers on time, safely as promised. Operations in Mexico combine intra- and inter-Mexico LTL and TL trucking with a robust lineup that includes: transloading, consolidation, deconsolidation, brokerage, and experienced cross-border. With Canada to Panama expertise, at CFI, people drive possibility. For more information, visit: cfidrive.com.
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