Fretting over fuel
Apr 27, 2009 10:18 AM, By Sean Kilcarr, senior editor, Fleet Owner
Though diesel fuel prices are relatively low and stable at the moment – they've remained steady for four weeks now, no more than a penny above or below $2.22/gal., down nearly $2 compared to the same period in 2008 – transportation experts continue to worry about how fuel prices are going to behave down the road, especially for truckers.
"It's really not so much the actual price of diesel fuel but price volatility," Bob Novack, associate professor at Penn State's Smeal College of Business, told FleetOwner. "If trucking companies are able to anticipate and plan for fuel price increases and decreases, then fuel causes less of an impact on their bottom line and – by extension – freight rates."
The problem last year was that fuel prices went up so fast for so long that truckers and shippers alike could not compensate for them, he explained. "It caught everyone in a bind. High fuel prices drove carriers out of business, while escalating fuel surcharges blew shipper freight budgets away."
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