HMD Trucking Facing the Fuel Crisis


September 7, 2022
Automotive
Editorial


Many carriers in the US market have been hit by skyrocketing prices of diesel fuel, which is turning into a snowball effect resulting in more surcharges added to the final price and HMD Trucking (hmdtrucking.com) is just one of them.

It is not a secret that the majority of trucks in America run on diesel rather than gasoline, and thus diesel price fluctuations have always entailed significant effects for truck drivers throughout the history of America.

Sadly, the key algorithm here is that this rise is passed down from larger businesses to medium and small ones, which ends up in passing it down to the finished product and to a price the end-user has to pay from his own pocket.

It is obvious that trucks have to start their journeys despite any prices and against all odds. HMD Trucking is just lucky that amidst this storm it has a steady line of business and a good portfolio of reliable key accounts. On top of this tough situation with the fuel comes the shortage of trucks in the market, caused by the pandemic and overall global economic recession. Although it might seem another negative factor, the impact of the phenomena is rather positive for logistic companies for their existing fleet appears to be sufficient to compete with rivals. Even more so as smaller companies have progressively much bigger problems than larger ones, which is nipping the American dream at the bud, giving room for maneuver to create monopolies in various industries.

The current price in Arizona is 5.953 USD and continues going up. Just a year and a half ago this price was around 3 USD or a little higher. It ought to be noted that in some states you still find more beneficial offers like 5.339 in Arkansas and 5.625 in Alabama, with California leading the list of the most expensive places to refill, offering diesel at 6.99 per gallon.

We have to state that not only trucks suffer from this grievous process we observe. All farmers, factories and other entities spend gallons of diesel every day to produce electricity with gen sets and power plants. All the people hired in these industries lose part of their income, which sadly affects their purchasing power, ability to repay mortgages and as a result even their retirement age. People have to continue working longer than they expected to deal with these dire straits somehow. That fires back at truck drivers, as at the end of the day they are just the same participants of the labor market as others. Recently an opposite phenomena started to emerge, which is brain drain, when experienced people are leaving the sector in pursuit of their previous profits, leaving their jobs to youngsters and laymen, and that cannot but depress the whole business both now and in the future.

So, shall we expect the overall increase of prices in the market caused by this narrowly targeted crisis in one particular sector? Unfortunately, the answer is affirmative and we cannot even accurately forecast all the accompanying effects that come with it. The problem is especially acute as this is the result of a whole bunch of factors, geopolitical, healthcare, economic, you name it. Many of them are still on the rise and not going to vanish.

Luckily, history tells us that for every action there is a reaction, so normally the solution is found, although it might come with some delay, but the immediate effects for the industry as a whole might be quite negative and unexpected. We can just continue monitoring the situation and have some flexibility to adapt to the new reality.