HOUSTON — Rising diesel prices are putting financial pressure on Texas truck drivers and could increase transportation costs across the supply chain ahead of the holiday shopping season.
The national average price for diesel reached $6.50 a gallon over the weekend, nearly twice the price from a year earlier, according to AAA. Semi-trucks can require 120 to 150 gallons of fuel for a trip, pushing some drivers’ refueling costs into the hundreds of dollars.
“We’re paying up to nearly $1,000 a trip to refuel,” one truck driver told Chron while at a Houston truck stop. The driver asked not to be identified.
John Esparza, president and CEO of the Texas Trucking Association, said the increase adds pressure to an industry that already faces challenges, particularly for independent drivers.
Nearly 1 million transportation workers operate as self-employed workers, according to the Bureau of Transportation Statistics. Many independent truckers use their own vehicles to haul freight for companies at predetermined rates and cover fuel, maintenance, insurance and other expenses from their earnings.
Esparza compared the arrangement to an Uber driver who transports freight instead of passengers.
Because fuel represents one of the largest operating expenses, higher diesel prices can significantly reduce drivers’ earnings. Esparza estimated that current fuel costs could reduce a driver’s annual earnings by about $35,000.
Diesel prices can also rise during the fall and winter as refineries shift some production toward heating oil, reducing diesel supplies, Esparza said.
He warned that continued cost increases could force some drivers to leave the industry, reducing the trucking capacity available to move freight.
“The great American truck driver is a bit of a dying breed,” Esparza said. “There’s less people that are willing to commit to being a truck driver in this day and age than there ever was.”
Higher trucking costs could reach consumers
The trucking industry moves more than 70% of the nation’s freight, according to the American Trucking Associations. About 3.5 million truck drivers work across the United States as employees or independent contractors.
Esparza said trucks transport or handle almost every type of consumer product, including food, furniture, supplies and fuel.
Higher trucking expenses can move through the supply chain as wholesalers and retailers absorb increased transportation costs and potentially pass them on to consumers.
“The consumer’s price of goods is going to change,” Esparza said, “and it will do that into the holiday season most certainly.”
The impact of higher diesel prices will depend on how long fuel costs remain elevated and how trucking companies and other businesses absorb or pass along the additional expenses.
