Are fuel prices high? Anyone who compares today's off-the-charts figures to the super-low levels of a little more than a year ago is likely to have a very firm, and possibly unprintable, answer to that question. Unfortunately, if many of the recent forecasts are accurate, the correct answer is "not compared to a few months from now."
What can you do about it? Again, the answers may be short but not as obvious as they seem. Let's explore three: charge more, buy less, and buy smarter.
"Charge more" and "buy less" are two sides of the same coin. Now may be the ideal time for many carriers to get their shippers to accept either outright rate increases or fuel adjustments in their rates. The economy is still racking up remarkable productivity advances. For carriers, that means many businesses are able to absorb some cost increases without passing them on to price-resistant customers.
In an era where gain-sharing is a popular concept, putting in a fuel-price rate adjustment that automatically moves up or down with changes in an agreed-upon index may be an easier sell than unilateral rate changes. Nevertheless, it's likely that some customers will say no.
That's where buy less comes in. Some customers may not be worth the trouble. Carriers that are going to exorbitant lengths to attract drivers and serve every shipper may decide that now is the time to pare their customer lists. In other cases, fleets may find they can buy less fuel by taking a closer look at their route structures, maintenance, training, and scheduling practices.
That examination may produce several ways to "buy smarter." You can subscribe to daily surveys that tell you the best prices today in the markets where your trucks will be. If you expect fuel prices to head higher, you may be able to lock in somewhat lower prices for later months by getting into the futures market. That doesn't mean you have to become a commodities broker yourself or even deal directly with one. Plenty of intermediaries, including individual consultants, fuel wholesalers, and truckstops, are looking for partners.
Buy smarter refers to more than fuel. Now may be the time to invest in a more fuel-efficient truck or fuel-saving devices that didn't look like good buys when fuel was cheap but would pay off a lot faster now.
Fuel-saving devices go beyond fairings, more efficient reefers, and PTOs. They include anything that causes drivers to use less fuel, such as better cab climate controls. And the high cost of driver communications and monitoring systems may suddenly seem worthwhile if they make it possible for drivers to spend less time looking for a phone or to be routed more efficiently.
The one alternative fleets can't count on is for the government to solve the problem. Not only is there no federal or state agency left to order rate increases, but firms must be careful not to give any appearance of engaging in collusive or coordinated activity in how they impose individual rate adjustments.
At this writing, there are bills in Congress and some legislatures to roll back fuel taxes. These bills face heavy opposition from lawmakers who want to keep the revenue, and from road builders who fear a drop in funding for their programs. Even if some of these bills are enacted, they will provide only partial relief. The only law that will make a real difference is the law of supply and demand.
The bottom line: Neither fleets nor the government can do much about fuel prices in the short run. But there are a number of alternatives fleets can pursue to reduce the pain of today's high prices (and tomorrow's potentially higher ones) or to get customers to share the pain.