Over the last several months, the costs to haul materials throughout the US consistently rose. The contributing factors to the high cost of moving your product are complicated. A few are the inflated cost of fuel, the rising fuel surcharges, driver deficiencies, warehouse accommodation, and labor. Our experts on medical transport logistics consider it a perfect storm of circumstances driving the increased cost of goods to vendors supporting US homes.
2022 average diesel prices remain elevated
According to the US Energy Information Administration (EIA), the average price of diesel is around $5.56. Year after year, it is up about $2 per gallon and nearly $3 per gallon from two years ago. This even excludes the west coast, where it averages much higher, with CA at approximately $6.80 per gallon.
Another variable influencing transportation cost is the fuel surcharge (FSC). To clarify, the FSC is a tool in the trucking industry that assists in balancing the instabilities in fuel costs. Integrating a fuel surcharge into transportation prices became widely accepted in 2005 after fuel increased above $4.00 per gallon for the first time in American history following Hurricane Katrina and contributes drastically to the final cost.
Trucker shortages and transportation equipment
Next is a national shortage of functional equipment, whether tractor-trailers, sprinter vans, straight trucks, etc. Additionally, the drivers for transportation equipment are in high demand due to a shortage. The American Trucking Association estimates America is 80,000 truck drivers short, an industry all-time high. We cannot mend this quickly; it will require years to compensate for this shortage. Firms are paying more elevated wages for drivers; nevertheless, this is not pulling in new drivers. Instead, it shifts the available drivers among the available pool.
Decreased warehouse capacity
Warehouses across the nation are full of unmoving products. In addition, excess goods from port delays we encountered last year sit in warehouses because it is out of season for some, or the warehouses are already overloaded and cannot accept additional inventory. Retailers are doing everything possible to move the excess inventory and control warehouse functional efficiency. Nevertheless, they risk further losses from high fuel costs and the lower selling prices set to control the bleeding.
That being said, with all the economic challenges the nation faces, this is a brief overview of the rise in transport expenses and the intricacy of managing the supply chain. All leaders are encountering supply chain and logistics challenges they never experienced before. Our experts on medical transport logistics are available to help you with supply chain and logistics issues you need help fixing or lack the staff to correct. We won’t eliminate driver deficits, but we can help you and your crew find coverage for your urgent freight movement. Our squad is dedicated to our clients and will work as an extension of your internal crews to provide the necessary updates you require to keep customers informed. We can work with you and your crews, attend to the challenges you are encountering, and work directly with you to designate a supply chain to suit your needs that allows you to continue with the performance of the schemes you are responsible for.