Rising diesel prices hiking furniture freight costs
Larry Thomas -- Furniture Today, August 20, 2012
HIGH POINT — After a summer respite that provided some temporary relief, diesel fuel prices are on the rise again - much to the dismay of trucking companies that transport furniture, as well as manufacturers and retailers who operate their own truck fleets.
The latest weekly survey from the U.S. Energy Information Administration put the average diesel price at $3.965 per gallon on Aug. 13, a jump of more than 11 cents from the previous week.
That's more than 30 cents per gallon higher than it was in mid-summer, when the average price hit an 18-month low of $3.648 per gallon the week of July 2.
Furniture carriers said last week that they expect the national average to top $4 per gallon within days, and the EIA data shows the average is already above that mark in several West Coast and mid-Atlantic states.
"It swings so rapidly that it's hard to make up for your increased costs," said Stan Froneberger, vice president of sales and marketing at SunBelt Xpress.
SunBelt, like virtually all other specialized furniture carriers, adds a fuel surcharge to their customers' bills. The surcharge is adjusted up or down each week, shortly after the new EIA data is released, but the recent sharp spike in prices has made it very difficult to recover all the increases, he said.
"It really plays havoc with retailers," added Jack Hawn, president of Zenith Global Logistics. "It's almost impossible for them to predict what their costs will be."
For furniture carriers, devising ways to save fuel has become a passion - or arguably an obsession - and it's easy to understand why. Many fleets log tens of millions of miles every year, so increasing fuel mileage by as little as one-tenth of a mile per gallon can save thousands of dollars per week.
"There's an old saying in this business that if you watch your pennies you can make a nickel," said Froneberger. "Trucking is really a game of pennies per mile."
Joe Wade, president of Shelba D. Johnson Trucking, said his company is constantly searching for ways to make its fleet more fuel-efficient, and towards that goal, recently purchased 20 new tractors and several used ones that get better mileage than the equipment they replaced.
The company also began buying diesel in bulk quantities so drivers can fill up at its Thomasville, N.C., terminal. Including delivery costs, that saves "only" two cents per gallon, but considering the company uses about 7,000 gallons per day, the bulk system is quickly paying for itself, Wade said.
"We also look at things like the rubber in the tires - if the rubber grips better, it will save fuel - and we have installed auxiliary power units in our long-haul trucks so drivers won't have to leave the engine idling," he said.
Wade said an idling engine burns about one gallon of diesel per hour, but using an auxiliary power unit when a driver makes an overnight stop burns fuel at a rate of one gallon per nine hours.
Froneberger said SunBelt recently took delivery of several new trailers with wind skirts that boost fuel efficiency by reducing wind drag.
"We have posted solid improvements in fuel efficiency in lanes where we have these wind skirt trailers ... and expect to increase their number in our trailer fleet once the study is completed," he said.
Froneberger said his company also gets drivers involved in fuel efficiency by paying them a quarterly bonus if they improve their mileage through techniques such as reducing idling time, reducing rpm's when shifting gears and reducing speed.
SunBelt's maintenance department measures each tractor for fuel efficiency. Units that are below the established baseline are brought in for repairs and can be taken out of service if not attaining the expected miles per gallon.