Fuel Prices, How Low Can They Go to Boost Freight?
We have all seen lower fuel prices at the pump, but not only does this affect the consumer, it also affects the trucker and the trucking industry as a whole, too. And with fuel prices that are continuing to fall, will freight deliveries rise?
Most trucking companies and independents tack on a fuel surcharge for shipping. The higher the fuel prices, the higher the surcharge. Conversely, the lower the fuel charge, the lower the surcharge. Generally, when fuel prices go lower, shipping increases because it costs less, overall, to get from one place to another.
As we all know, there has been a major trucking boom in the last few years. Plus, if you have been tuned into Trucker to Trucker, you've also been reading that the boom may be coming to an end. However, with fuel prices going steadily lower from month to month, there should be an uptick in freight shipments. And yes, although there is some amount of shipping volume that has been increasing, it hasn't kept on par with the downward surging fuel costs.
One thing to consider is this. After the Christmas season, and all of the massive shipping done during the holidays, there has always been a slight let down in freight delivery during January. Consumers have been satiated from buying during the holiday season, and stores just don't see the traffic after the holidays because of that. The January Blues affect virtually every aspect of the industry, from car sales, to factory manufacturing and consumer goods on every level.
As in every case since, lower fuel prices boost freight, and it's way to early to tell if that won't be the case this time.
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