The Impact of Fuel Prices on Refrigerated Transportation Costs

We might not think about it often, but the global sale of perishable foods, pharmaceuticals, chemicals, plants, and lab reagents hinges on one singular point in the supply line — refrigerated trucks. How do rising fuel prices on refrigeration transportation impact the whole operation — and its costs? If the answer to this question seems painfully simple, that’s partly because it is. That brings us to another potential result of rising fuel prices — taking serious steps to optimize operations.

The Impact of Fuel Prices on Refrigerated Transportation Costs

Refrigerated trucks, more commonly known as reefers, usually run on diesel fuel. It takes the truck to its destination and helps cool the vehicle in some cases.

At first glance, you may think that rising fuel prices on refrigerated transportation leave companies with two options.

1. Accept lower profit margins (especially in competitive markets where companies must retain their share)
2. Pass the increased price of fuel and fuel surcharges onto customers.

Both are likely consequences, but truck operators and businesses within industries that rely on refrigerated transportation have other options.

Invest in a New, More Efficient Fleet of Reefers

Increases in fuel prices give companies the incentive to upgrade their fleets. Newer, more fuel-efficient reefers use modern engines and aerodynamic designs to slash operation costs. Even electric vehicles can be a fantastic alternative when prices rise.

Route Optimization to Save Costs

As costs increase, transportation companies rethink the efficiency of their routes faster than increased transportation costs.

• Is the shortest route truly the fastest?
• Where does the fleet run into bottlenecks?
• Can anything be done to reduce idling?

The answers to these questions can help lower fuel costs. They can also benefit the environment.

Better Solutions for LTL Shipments

LTL (“less than a truckload”) shipments are all too standard in the refrigerated goods industry. While half-filled trucks aren’t optimal, companies often deem the lost efficiency acceptable when fuel prices are low.

The rising cost of diesel lead to a rethink about truck transport. Third-party logistics companies come in to combine shipments and help frozen goods firms keep their operational costs down.

Higher Fuel Prices on Refrigerated Transportation and Less Sporadic Shipments

Simply running fewer shipments is another way to mitigate the impact of rising fuel costs. The 3PL model keeps shipments running on time. In some cases, it can be a good idea to wait until a reefer is full before driving a route. This can keep freight rates and shipping costs down.

Install Fuel Management Systems

Even without investing in a new fleet, fuel management systems can help transportation companies analyze consumption and usage. Better data allows them to zoom in on areas for improvement that can keep fuel expenditures to a minimum.

This enables a freight transportation company to stay competitive in a changed market long-term.

A Final Word

Rising fuel costs are painful throughout the supply chain, from manufacturers to consumers. However, they can give birth to innovations that benefit the environment. Also, it sets companies up for improved profit margins once fuel costs come down again.

Cannonball Express Transportation

Cannonball Express Shipping Company has been providing top-of-the-line service at a reasonable rate. Based in Omaha, Nebraska, we provide nationwide refrigerated LTL services, as well as, local delivery services. Contact us today!

Nationwide Shipping Company Services:

• Refrigerated LTL deliveries in the lower 48 states
• Refrigerated Cross dock

Local Shipping Company Services:

• Redelivery Services
• Truckload & LTL Capabilities
• PUP
• Cross dock
• Transload
• Warehouse and Distribution capabilities from multiple Omaha Locations

Nebraska Warehouse One-Stop-Shop | TechnologyEnabled 3PL Value-Added Services Warehouse | Freight Broker | Logistics

Nebraska Warehouse doesn’t just help to facilitate your shipments, but we are truly a one-stop-shop solutions provider. Our services include:

• Real Estate Development
• Refrigerated Services
• Warehousing