The price of grade gasoline in the United States has risen by an astounding 79 cents in the last two weeks, setting a new record of $4.43 per gallon. Most machines in the trucking company with diesel engines have seen this increase marked over the last two weeks. It increased by $1.18 per gallon, up to $5.20 per gallon. The new diesel price has affected logistics companies for the past few days.
The extremely high gas prices have affected logistics company bottom lines. These companies have not yet recovered from the pandemic effects and are experiencing shortages in supply chains and labor. Most of these companies’ CEOs are afraid that this cost is likely to affect the consumer too. Because these trucking companies typically transport every product, if gas prices rise, so will the prices of goods.
A New High Record for Gas Prices
High inflation levels have caused the United States to pay higher prices for almost everything than ever before. In addition, the price of gasoline skyrocketed. Consumer inflation recently reached a new high of 7.9 percent higher than the previous year. For the last 40 years, this has been the sharpest spike ever.
According to the Department of Energy update, unbelievable stats were witnessed. The report indicates the price of diesel also increased by $1.15 in early March. In history, this has been the first time ever that diesel prices have been over $5 worldwide.
In the logistic companies, especially the trucking companies, everyone has been experiencing the impact of the high gas price increase. This has made most companies increase the price of their goods too.
What is the Impact of Rising Gas Prices on Logistic Companies?
The recent increase in gas prices has caused most consumers to change their shopping habits, thus affecting the trucking companies. Many people are now considering online shopping to receive goods, which puts the weight on the logistics companies. While consumers are trying to cut costs on gas by shopping online, the demand for transportation and shipping increases.
Trucking companies are now trying to find ways to get different revenue streams so that they can still be in control of their money. Experts are now advising truckers to work together with companies and warehouses to get direct contracts to offer their trucking services.
Due to the high price of gas, independent owner-operators and smaller logistics companies are finding it hard to manage with the new prices, thus trying to exit the business. A trucking company also noted that their drivers have to queue to get gas because there is a shortage too. Trucking companies are still trying to recover from supply chain issues and labor shortages. The future of logistics is unpredictable because of these obstacles.
K-Way Express is always on the frontline, finding solutions to certain obstacles. We offer pick-up and delivery services to our clients. To get our services, visit us at 1300 6th Street, Winsted, MN 55395 or contact us today.