With the rising cost of fuel, the freight industry has hit some definite bumps in the road. The surge in prices has been impossible to miss, with many roadside billboards announcing that gas now costs $4, $5, or even $6 a gallon or more in some areas of the country. For the vehicles that carry out refrigerated and frozen transportation services, both the trucks and their temperature-controlled trailers run on pricey diesel fuel, and so any increase in fuel expenditures especially impacts companies that rely on this type of shipping. Learn more about the implications of rising fuel costs for the refrigerated and frozen sector and how less-than-truckload (LTL) shipments can help provide a solution to the strain this puts on businesses in the transportation industry.
Implications of Rising Fuel Costs
The high prices that freight transportation companies must pay for fuel have far-reaching effects on other aspects of their business.
These can include changes to:
- Transportation costs. When fuel prices increase, carriers must raise their prices to offset the extra expense. However, the rising fuel costs impact logistics for more than just the trucking companies. If it costs more for the carrier to convey goods, they must charge the shipper more to transport the merchandise. Then, since the shipper is paying more, the consumer will ultimately be making up for the additional costs by paying higher prices for goods.
- Service area. A company’s service area typically consists of the region in which it can provide cost-effective shipments. However, every carrier has its own tolerance for changes in budget and cost. This means that, as fuel prices increase, sometimes a company’s service area will have to decrease proportionately. This can be especially tricky for temperature-controlled transportation companies as the refrigeration unit is powered by diesel.
- Service frequency. In addition to service regions, another area in which companies can cut back in times of financial strain is consolidating offered routes. By reducing the frequency with which they offer a certain service or even the number of services provided, organizations can save money on the fuel costs they would otherwise incur. This is one of the advantages of leveraging LTL shipments as these services become more fuel-efficient and lower cost as smaller shipments are compounded into one truckload.
Effects on Frozen Transportation Industry
In the refrigerated and frozen transportation industry, temperature-controlled trailers and trucks operate on diesel fuel. The current high cost of diesel, therefore, hits the frozen transportation sector particularly hard. When refrigerated shipping costs increase, it forces transportation companies to raise their trucking prices to make up the difference and still turn a profit.
The implications discussed above turn into a reality that causes a shortage of trucks in certain areas of the country. This also leads to rising inflation as the trucking companies must pass on the increased costs until it is the consumer who bears the financial burden. Carriers have to prioritize profitability to stay in business, even if it means limiting their truck runs or sacrificing operational efficiency to do so. A reputable logistics company, however, can help you combat rising fuel costs by consolidating LTL shipments to maintain efficiency while still servicing all available trucking lanes.
How Mulder Brothers Brokerage Can Help
Consolidated, temperature-controlled shipments by Mulder Brothers Brokerage, a trusted LTL provider, allow you to combine your partial load with other shippers’ goods into one truck. LTL shipping can be a cost-efficient option for you as suppliers are able to share the shipping costs of a single truck, therefore you won’t need to pay for unused space. LTL is also fuel-efficient as this shipping method reduces the number of vehicles needed to transport goods.
At Mulder Brothers Brokerage, we love building long-term relationships with our partners. Our team supports both our customers and our carriers with reliable assistance 24 hours a day, 7 days a week. We strive to respond to every call with a working solution within 15 minutes to best serve you.
Partner With Mulder Brothers Brokerage
Rising fuel prices will continue to impact the transportation industry. As trucks in the refrigerated and frozen logistics sectors and their temperature-controlled trailers rely on high volumes of fuel to keep things moving throughout the supply chain, refrigerated freight rates have also increased significantly.
At Mulder Brothers Brokerage, we are here to help with our consolidated LTL refrigerated shipments as an economical way to transport frozen and refrigerated goods. We are your comprehensive resource for third-party logistics (3PL), temperature-controlled storage, transportation, and more. Contact us today to learn about our services and how working with Mulder Brothers Brokerage can lessen the impact of expensive fuel costs on your operation.