By Michele Fuetsch, Staff Reporter
This story appears in the Oct. 5 print edition of Transport Topics.
U.S. retail diesel prices dipped again last week as the national average reached $2.601, 2.1 cents lower than the week before, according to the Department of Energy.
The national retail price average has now declined 7.3 cents over the past four weeks, welcome news to the recession-weary trucking industry.
At the same time, DOE said the retail gasoline price average fell for the seventh straight week, this time by 5.3 cents to $2.499.
While declining fuel prices and generally positive economic news have buoyed spirits in trucking a bit lately, some analysts still were concerned about the near-term business picture.
“The one major problem with the positive economic data we’ve seen re-cently — and this is probably going to be of greater interest to the people in trucking — is that the consumer component has been very weak. People just aren’t spending money,” said Rob Kurzatkowski, a commodities analyst with OptionsXpress Holdings Inc.
Crude oil prices, meanwhile, have spent months swinging back and forth in the $65-to-$71 a barrel range on prognostications about whether the global economy is recovering or still in a trough.
The closing price on the New York Mercantile Exchange for crude oil for November delivery was at $70.73 a barrel on Oct. 1.
Fuel prices are dropping because of weak consumer confidence and because of a chill in the commodities markets as investors who earlier had feverishly bought oil futures take a closer look at underlying economic data, Kurzatkowski said.
Brian Fielkow, president and owner of Jetco Delivery in Houston, a general freight carrier, said that to be successful in today’s economy, he concentrates on what he can control, such as customer service rather than obsessing over fuel price fluctuations.
“All we’re trying to do is just play the hand we’re dealt and make the most of it and stay very optimistic,” Fielkow said.
Fielkow plans to replace some truck models in his 80-plus fleet next year and is determined to make the right choices fuel-wise.
“That’s why it’s really important to know what you’re looking at, analyze as best you can before you buy it,” he said. “We want the most energy-efficient, cleanest-burning truck, but we also don’t necessarily want to be the first in line for innovation,” he said.
Mike Hineman, fuel buyer for Skinner Transfer, a general freight carrier in Reedsburg, Wis., said that to save fuel his fleet last winter set back the speed limiters on its trucks to 66 mph from 69 mph and adopted stricter idling rules for drivers.
Skinner and Jetco were on the same path as many firms, according to a report from John Larkin, a transportation analyst with investment banking firm Stifel, Nicolaus & Co. Inc.
Larkin found that high fuel prices and volatile price swings in 2008 led many truckload management teams to find ways to protect themselves from price shocks.
Among the strategies firms are using, Larkin said, are effective fuel surcharge programs, training to make drivers more fuel efficient, auxiliary power units, and greater attention to such things as tire pressure and aerodynamic fairings.
Fleets also are developing relationships with truck-stop operators to get discounts on fuel, Larkin reported.
