According to American Transportation Research Institute’s An Analysis of the Operational Costs of Trucking: 2017 Update, fuel represented on average 21% of a fleet’s operating costs. In fact 2016 fuel costs were lower than they were in 2015 and for the second year in a row were surpassed by driver wages as the biggest cost to a fleet.
While I am happy that we are enjoying low fuel costs, I wonder how long they will stay low.
You all probably think I am crazy to think that, but I want you to do me a favor. Think back to Thanksgiving 2014 when the cost of fuel was around $4 a gallon. If I had asked you then what fuel costs would be in the months following November 2014 I am betting that nearly all of you would have said $4 or more. Very few of you would have guessed that they would dip to the levels we have seen since then.
So basically you were wrong in 2014. And my question to you is what makes you think fuel prices will continue to stay low in the future? We’ve already shown that we aren't all that good at predicting when it comes to the cost of fuel.
If you take a long-term look at fuel prices you will see that they fluctuate dramatically, and that is not likely to change. And remember that even with the lower cost of fuel, it still accounted for 21% of a fleet’s operating costs in 2016.
But that is almost beside the point. What I am trying to get at here is that if back in 2014 you had based your decisions on fuel staying at $4 a gallon you would have been surprised when it decreased and while it might have been a positive surprise it still might have meant you didn’t make the best business decisions.
As planning is underway for next year, I challenge you all to consider your assumptions about fuel and fuel prices. While it would be great if fuel prices stayed low, the reality is they could rise and if they do the surprise won’t be quite so pleasant as it was in 2015.