Diesel price drop offers relief, highlights other trucking issues

Transportation management software can make all the difference in allowing businesses to successfully meet the growing demand for ground shipping in today's economy. According to a recent press release from the American Trucking Associations (ATA), the organization's chief economist Bob Costello said he anticipates a strain on industry capacity in the coming years as the increasing need for freight services surpasses fleet expansion rates at many transportation companies.

"At the moment, fleets are expanding slowly, which means that once we see more consistent, accelerated economic growth - think 2.75 percent or 3 percent increases in GDP on a regular basis - it will eventually cause very tight capacity," Costello said.

These trends could present unique challenges to fleet managers who are already concerned with the ability to run fully organized operations at a limited overhead cost. As businesses in a variety of industries continue to demand more shipments, freight organizations must take advantage of everything they can to ensure they are able to maintain steady profits and consistently satisfy customers. In other words, many fleet managers are on the lookout for a break in the industry that may ultimately lead to more efficient operations.

Diesel prices decrease nationwide
The latest data from the U.S. Department of Energy (DOE) suggests such a break may be occurring in the cost of fuel. According the department's Energy Information Administration (EIA), diesel prices declined 1.3 cents over the last week, bringing the national average to roughly $3.89 per gallon. The latest measurement is 15.3 cents lower than it was during the same time last year. Fuel prices fell across individual regions of the U.S. as well. For example, the West Coast reported the most substantial decrease with 2.1 cents over the same time period. However, that region's national average continues to be the highest price in the nation. The Gulf Coast region currently has the lowest diesel prices at roughly $3.77 per gallon.

TruckingInfo, an online industry news publication, said the nationwide reduction in diesel costs is a result of a large drop in domestic oil commodity prices. These trends will likely continue into the winter because oil supplies have grown steadily in recent weeks.

Despite the reduction in fuel prices, sustainability will be play a major role in helping fleet management companies meet the growing demands of the industry. According to Fleet Owner, a monthly magazine covering trucking issues, the price of diesel exhaust fluid (DEF) has increased just as the DOE has reported a nationwide reduction in the cost of diesel. DEF is a product used to limit the amount of mono-nitrogen oxides found in diesel exhaust fumes. Fleet Owner said it is used in most diesel-powered trucks in the U.S. Currently, the price of the DEF, which contains 67.5 percent water and 32.5 percent automotive grade urea, is at $2.79 per gallon.

Sustainability still an important issue
While lower fuel costs are helpful in any attempt to expand ground transportation operations, the importance of limiting greenhouse gas emissions and other pollutants has become a central focus for many fleet managers. Oil commodities continue to fluctuate on both the domestic and national level, meaning prices are subject to sudden changes. As a result, many companies have found sustainability to be a more reliable way to reduce overhead costs without sacrificing productivity.

Earlier this year, the ATA was one of seven winners in the U.S. Environment Protection Agency's (EPA) 2013 SmartWay Affiliate Challenge. A press release from the ATA said the award recognizes a commitment to promoting best practices for reducing greenhouse gas emissions throughout the trucking industry.

"Increasingly, companies are becoming cognizant of their carbon footprint and reducing greenhouse gases," Bill Graves, president and CEO of the ATA, said, "However, fuel efficiency has always been of critical importance for trucking and ATA, which is why our participation in EPA SmartWay is a no-brainer."

Regardless of current fuel prices, fleet managers can effectively supplement other sustainability initiatives by investing in advanced logistics software programs. Saving money on diesel or DEF requires a close attention to the various details of any transportation operation. In other words, businesses need technology that makes it easier to plan faster routes, maximizes the loads on available trucks and ultimately achieves the most efficient use of all resources.