Diesel Jumps 8¢ to $3.801; First Increase in Six Weeks

The U.S. average price for retail diesel surged 8 cents to $3.801 a gallon last week, the largest increase in more than six months, the Department of Energy reported.

Trucking’s main fuel is now 72.8 cents above its $3.073 price a year ago, according to DOE’s Oct. 17 survey of fueling stations. Despite the upturn, diesel is still 32.3 cents below the two-year high of $4.124 set May 2. Last week’s increase broke a string of five straight declines that had cut the price of diesel 14.7 cents.

The retail average for regular gasoline also increased for the first time in six weeks, rising 5.9 cents to $3.476, DOE said. The price of gas had dropped 25.7 cents over the five weeks leading up to last week’s increase. Gasoline is now 64.2 cents above its price one year ago, $2.834.

The main cause of diesel’s sharp rise was the climbing price of crude oil, said Neil Gamson, an economist with DOE’s Energy Information Administration.

“That’s starting to get passed on to the pump price,” he said.

Crude oil rose more than $12 a barrel after hitting its lowest price in a year on Oct. 4, when it closed at $75.67 on the New York Mercantile Exchange. Two weeks later, on Oct. 18, crude closed at $88.34. Crude closed at $86.11 on Oct. 19.

“It’s possible that diesel could continue to rise,” Gamson added. “I don’t think all of that has been passed on.”

Another factor in diesel’s increase was the rising demand for distillates with the heating season starting to kick in, Gamson said.

The cost of fuel is a top concern for trucking companies like Rising Sun Express LLC in Jackson Center, Ohio.

“It’s no secret it’s your No. 1 budget expense now, when it used to be wages,” said Barb Howerton, the truckload carrier’s chief financial officer. “That’s the industry now.”

In addition to its fuel surcharge, Rising Sun has lowered its fuel costs by negotiating discounts with truck stop chains and limiting its trucks’ speed to 68 miles per hour and at or below the legal speed limit, Howerton said.

“Outside of that, it’s driver education and driver awareness,” she said.

Howerton said the company trains its drivers to save fuel through driving techniques such as accelerating gradually and watching rpm.

Oak Harbor Freight Lines, a regional less-than-truckload carrier based in Auburn, Wash., also has placed an emphasis on driver performance, said Dan Vander Pol, the company’s director of maintenance.

“We talk to drivers who seem to be getting better fuel mileage from the same truck on the same routes,” he said.

Vander Pol said he recently led a training session at the company’s Auburn terminal in an effort to improve mileage.

Drivers were told they could reduce fuel consumption through measures like up shifting earlier, using cruise control as much as possible, shutting their engines down right away when they arrive at a customer and keeping an eye on the fuel mileage figure on their co-pilot displays.

Vander Pol said the company compiled its drivers’ fuel mileage statistics before the training and is now monitoring those numbers afterwards to see if it has made a difference.

“We’ll roll it out companywide if it has an effect,” he said.

In another effort to improve fuel economy, Oak Harbor is testing synthetic motor oil in its trucks, though the oil itself is double the cost, Vander Pol said.

The company also has started using lower tread on retreads for tires on its trailers and dollies as a way to improve fuel economy while also reducing tire failures.

Coastal Pacific Xpress Inc., a refrigerated carrier based in Surrey, British Columbia, has seen fuel mileage results from its bonus program for company drivers, said senior manager Kevin Johnson.

The program, implemented about three years ago, offers incentives for drivers who stay within certain parameters for speed, idling time and RPM, he said.

“We saw significant change, especially in speed and idle time,” Johnson said. “The guy behind the wheel is really the most significant way to increase fuel mileage and save fuel.”

CPX has also saved fuel by purchasing new trailers equipped with side skirts to improve aerodynamics. The side skirts haven’t improved fuel mileage at lower speeds in the mountains, but they have made a difference on the prairies and the interstates, Johnson said.

The company uses aluminum wheels throughout its fleet to reduce weight and cut fuel consumption, he said.

In August, CPX began testing wide-base tires.

“A lot of owner-operators are coming back and saying they are seeing some significant fuel savings,” Johnson said.