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How are lower fuel costs affecting North America?

Within North America transportation fuel costs have decreased over the winter holidays. However this led to a higher demand for railcars and trucks to ship domestically throughout the United States and Canada. The companies within the trucking industry have a hard time maintaining drivers due to difficulty and stress from the job. “The transport industry should transfer savings provided by fuel to employ more drivers, or to increase the pay of their current drivers,” suggests Frank Muir President of the Idaho Potato Commission. “The transport industry needs to think of the longevity of their customers.”

When fuel prices were higher, many independent truckers left the industry, with lowered fuel prices, ex-truck operators may have the opportunity to re-enter the market. “There has not been any real movement on truck pricing due to the decrease in the price of fuel,” states Stu Follen of SL Follen Company. “However, if fuel remains “low” it may be encouraging.”

Freight costs directly affect all markets, but more so those involved in importing and exporting. “Any savings in costs will impact our volumes in a positive way,” explains Raul Millan of Vision Import Group. “Lower freight rates will allow us to offer customers a more attractive price for more promotional programs. This in turn, will help increase our import and sales numbers.”

Although sea rates and road transportation costs have been moderated, diesel has not. “The rate reduction has not been great,” explains Kelly Ciceran of Ontario Apple Growers. “Diesel fuel has not fallen in price as much as gas has.”

Other businesses do not see the positive effects of lower fuel at all. “We got out of deliveries seven years ago because of the high cost of fuel,” declares Deb Benner of Heritage Line Herbs. “We are not at all affected by lower fuel prices. Eventually gas will revert back to regular pricing.”

For more information:
Frank Weir
Frank.Muir@potato.idaho.gov

Raul Millan
raul@visionimportgroup.com

Stu Follen
follen@slfollen.com

Kelly Ciceran
kciceran@onapples.com

Deb Benner
heritagelineherbs2014@gmail.com