High diesel prices take a toll on Minnesota trucking industry
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Yusuf Yusuf drives his truck 4,000 miles every week.
Yusuf has been a truck driver for nine years, and he thinks the current price of diesel fuel is "crazy." And says his boss's main concern right now is saving as much fuel as possible.
He recounted a story of how he had to fill the tank of his semi-truck in California, where diesel is over $8 per gallon. He said, at the time, his boss questioned why he would do that because of the high prices of fueling up in the state.
Diesel prices in Minnesota are the highest they've ever been, currently costing drivers over $6 per gallon, according to AAA. Prices have increased by over $2 per gallon since the U.S. Began its war against in Iran in March and Ukraine struck Russian oil refineries over a week ago.
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"As a driver I can get good money, but when you get a load and get $3,000 [for a tank of] fuel, you see that's already negative though, and [in] some states you can't even get a load like California, that's the place I mostly go, and it's too high," Yusuf said.
High diesel prices are having a wider impact across the economy. The Minnesota Department of Transportation is also feeling negative effects on their budget.
"The greatest impact, the direct impact that we will see with increasing diesel prices, really centers around our winter operations," Jed Falgren, the department's maintenance engineer said. "We have our plow trucks out all year long supporting other operations, but our greatest use of diesel fuel occurs when we're in our snow and ice removal processes during the winter."
MNDot operates 850 diesel powered plow trucks which burn through thousands of gallons of diesel every year, especially in the winter. In the warmer months, their trucks burn through 75,000-80,000 gallons of diesel per month, but when winter hits, they burn through 150,000-160,000 gallons per month month, Falgren said.
"Short-term we look at doing some of the same things that anybody would do, is there a way we can drive less," he said. "Is there a way we can look at maximizing our fuel economy? Making sure that our fleet is in as good a condition as possible?”
“We'll continue to do those kinds of things, but unfortunately, there ends up just being a limit on how much you can do on a technology that is so critical for us to do the work that we do."
Falgren said they've explored long-term solutions like using hydrogen as a potential fuel, but it won't help the short-term issues.
Ben Froehlich is the Vice President of Operations for Volk Transfer, Inc., a carrier based out of Mankato. Froehlich said their fleet of 40 trucks has already driven nearly 9 million miles so far this year.
"We've done a little more on our routing. We were running pretty lean prior to this, so there wasn't a whole lot of room for improvement," Froehlich said. "A lot of our savings really has come down to changing in habits the drivers have had. [We’re] paying more attention to what they're doing, [they’re] paying more attention to what they're doing."
Volk freight truck drivers usually fill up 200 to 240 gallons at a time, and the cost has doubled to more than $1,200, according to Froehlich.
"We're not going to stop moving freight because fuel's expensive. Our job is to become more efficient and continue to taking care of the customers," he added. "But if diesel does retain the $6 per gallon or higher pricing, it is going to change the economics of trucking, and ultimately that will it will come downstream to the consumer more than it already has."
Ahmad Ibrahim owns Reyhana Transportation in Blaine with a fleet of six trucks. He said they deliver mainly to Wisconsin and Iowa, driving around 7,000 miles a week.
"The price of diesel affects the farmers. [But] it can affect everybody, no matter what you do, no matter how good your business is, because fuel is the is the main resource for this country," Ibrahim said.
Ibrahim said he had to raise rates for his customers, but it isn't even enough to cover the fuel costs.
"Every time the price goes up, we get affected right away," he said.
Ibrahim added he'd seen a lot of people leave the trucking business due to the cost.
"If you’re coming to me and said, 'Hey, I'd like to open a trucking business right now,’ I will tell you, ‘Go fly. Don't even think about it,’" Ibrahim said.
And high fuel prices affect a company’s ability to operate and stay in business.
"What we've seen happening is some contraction in the industry. We've seen some companies literally just exit, shut the door," said John Hausladen, president of the Minnesota Trucking Association. "We've seen some sell to other fleets, we've seen a number of fleets actually reduce the number of trucks that they are operating and we have actually seen a reduction in the number of truck drivers."
Although the number of truck drivers is decreasing, he said trucking won't go away. That decrease will instead affect consumer goods.
"Because trucks run on diesel, and virtually everything spends time on a truck, this will translate directly into increased prices to consumers," Hausladen said. "Some of those increases have already taken place. That's just the nature of what transportation is."
