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Diesel costs deliver heavy blow to North American trucking industry

Experts say that with diesel prices remaining elevated, forcing significant costs onto shippers and trucking companies, the impact of fuel costs on inflation could put a dent in consumer spending.

Earlier this month, the Federal Reserve announced a half-percentage-point increase in interest rates, the largest hike in over two decades. The U.S. inflation rate is at 8.3%, near 40-year highs.

Jordan DeWart, a managing director at RedWood Mexico, based in Laredo, Texas, said the types of consumer goods that could be immediately affected by higher diesel prices include fresh produce. Redwood Mexico is part of Chicago-based Redwood Logistics.

“With produce, that’s typically more in the spot rate business, and any of those smaller trucking companies are going to be heavily impacted by fuel costs,” DeWart said.

The U.S. imported more than $15 billion in fresh produce from Mexico in 2021, including avocados, tomatoes, grapes, bell peppers and strawberries, according to the USDA. quoted DeWart as saying: “Everything coming northbound from Mexico through Laredo, the rates have been very sustained, but fuel prices keep going up, presumably with any differences being absorbed by the trucking companies in the spot market. When we talk to asset-based truckers, especially the smaller companies, they’re really feeling the pinch.”

Canada: P.E.I. trucking company copes with high diesel prices
The high cost of diesel fuel has one P.E.I. trucking company adjusting how it outfits its vehicles. Andy Keith, president and CEO of Seafood Express Transport, has made changes to the company's trucks and staffing.

“(Fuel) has been continually increasing,” said Keith. About a year ago, Keith hired a full-time fuel coordinator to watch prices along the company’s routes and direct drivers to stations with the lowest prices. It might mean giving up the free shower offered by the truck stop across the road, but it could save the company hundreds of dollars at the pumps, he said. Even a one-cent-per-litre saving adds up fast over the company’s fleet of 87 tractor-trailers.

Fuel surcharges – which are added on to the freight cost — help, but they aren’t keeping up, he said.


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