NEW YORK, N.Y. — The national average price for diesel has reached $6.31 per gallon, a record high, according to AAA. The increase is creating challenges for trucking fleets across New York State.
The New York state diesel price average is $6.26 per gallon, up from $5.95 one week ago.
Zach Miller, vice president of government affairs at the Trucking Association of New York, said the continued increases are creating significant challenges for fleets. Miller said the Northeast is the most expensive region to operate a trucking company in.
Small fleets face thin margins
Most trucking companies are small to mid-sized fleets, and most are still family-owned and operated, according to Miller.
The industry as a whole has profit margins from about 1.5% to about 3.5%, so companies do not have a lot of capacity when it comes to increased costs. He said this is especially true since the freight market has already been in a recession for the last few years.
Miller said the concern for fleets is their per-mile cost and what it does to their total cost of operation. He said there is also concern that those costs will hit consumers and influence consumer behavior.
It usually takes time for costs to be passed down through the supply chain. In the meantime, he said policy changes can offer immediate relief.
“We know that there are things the state cannot do as it relates to this, but there’s a lot they can do,” Miller said. “And they can be creative and they can be proactive and they can offer industry areas of relief that will have an impact on their bottom lines and, of course, on the customer and the end user.”
Push to eliminate highway use tax
Miller said that although this is also a geopolitical and federal issue, New York state can and should get rid of the Highway Use Tax, calling it burdensome. He said it is hard to predict when the market will stabilize.
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