Fuel for Thought
There are a lot of drivers that are struggling to find acceptable rates. We have seen a drop in rates lately that have many trying to keep afloat. It can be expensive to own and operate a truck in certain economies. At least there is a slight respite from the high prices of fuel.
At the time of this writing, fuel prices have been on the decline for weeks. The national average price for diesel fuel was $4.55 per gallon the week of 10/23, for the week of 10/30 it had dropped to $4.45 and this week (11/6), it has again lowered to $4.37 . Just to put this into perspective, one year ago, the national average price of diesel fuel was $5.34 per gallon, that’s $0.97 per gallon higher than the current national average.
I bring this up to show that while we may see prices fall slowly, we not really notice it as we would dramatic swings in price.
When you are considering your CPM (Cost Per Mile), to determine if a load will be profitable, make sure to use current numbers. It is far too easy to “know your numbers” only to find that you didn’t account for fluctuating costs. If you are still relying on your last year’s CPM to find loads, you could be hard pressed to find any to cover your outdated CPM.
Especially during a down economy, but in truth it should be in any economy, know your numbers and keep them current. Fuel can be one of your largest expenses, yet it is also one you can control to a degree. Fuel economy can be the difference between profit, loss or break even and you can purchase wisely and consume wisely to improve your bottom line.
Of course buying and burning fuel only comes when the wheels are turning and without a load it is of no use, so watch those expenses, like fuel costs, closely. Some margins will be smaller than others, but some profit is better than none or worse yet, taking losses. Don’t lose your loads due to planning for higher fuel costs that are no longer current.
For anyone unaware, the EIA publishes national average fuel prices each week. These numbers are posted every Monday, except national holidays, then they are posted Tuesday. They publish not only the national average, but the average for each PADD (Petroleum Administration for Defense Districts), as well as the west coast minus California and also just California prices.
This is the website where you can get the current national average fuel prices EIA.Gov Fuel Prices
Note: The photo above is a screenshot of the spreadsheet I built to keep track of fuel prices and the Weekly Fuel Surcharge (FSC) rate, based on the scale used by the carrier I am leased with, your carrier may use a different scale to determine FSC, so I redacted a portion of the document.
Without knowledge action is useless and knowledge without action is futile.
- Abu Bakr
See you down the road,