June 2, 2022 / By Erika / Logistic • Transport • Trucking / 0 Comments
Soaring Fuel Prices Putting the Squeeze on Owner-Operators
As fuel prices continue to surge, many of the 350,000 registered owner-operator drivers are looking at changing lanes and becoming company drivers. “It’s not happening yet, but it’s coming,” said William “Lewie” Pugh, an OOIDA executive vice president who worked as a leased owner-operator for 24 years, said of free-agent independent drivers either leaving the business or deciding to change the way they operate.
According to weekly data from the Energy Information Administration (EIA), on-highway diesel pump prices are still hovering around record-high levels, averaging $5.72 a gallon nationwide. On top of the soaring fuel prices due to rising oil prices, flattening demand and lower spot rates are putting owner-operators in a tough spot. As a result, many drivers are looking to change the way they operate by either becoming company drivers and avoiding the fuel mess or by leasing their independent services to a fleet.
Freight Industry Downshifts from Hectic Pace for Shipping
As we approach the midway point of the year, the survey-based Logistics Managers Index fell for the first time this year. In fact, it fell from a record high in March to the lowest level since January 2021. However, not every sector in the industry was hit equally. While the inventory and warehousing sectors only exhibited minor changes, the transportation sector showed the steepest drop.
“Despite the slowdown in transportation, respondents still indicate growth in the sector, just at a slower pace than what we’ve seen over the last 18 months,” the report stated. “It can be observed that the two curves have not yet inverted, suggesting that while the frantic pace in the transportation market has slowed down, we have not yet tilted into a full-on recession.”
Rail Regulators Want to Speed Emergency Service Responses
Recently, the Surface Transportation Board (STB) announced the upcoming policy changes that will overhaul the existing emergency service rules. The new policy would essentially set up an accelerated response to emergency situations.
The STB mentioned many issues faced by the rail sector, including:
- tight car supply
- unfilled railcar orders
- missed switches
- ineffective customer assistance
“The rail service challenges shippers are currently experiencing are amplified by certain recent conditions but are not new,” STB Chairman Marty Oberman said in a release. “For several years the Board has gathered information showing that the existing emergency service rules are too cumbersome to be of use to shippers in need of immediate relief.”
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SOURCES:
https://www.freightwaves.com/news/soaring-fuel-prices-leave-owner-operators-with-tough-choices
https://www.ttnews.com/articles/white-house-eyes-emissions-fuel-prices-congress-finalizes-supply-chain-bill
https://www.ttnews.com/articles/freight-industry-downshifts-hectic-pace-shipping
https://www.freightwaves.com/news/rail-regulators-want-to-speed-emergency-service-responses
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