The American Trucking Associations yesterday said that the trucking industry paid $62 billion for diesel fuel last year, or $10 billion more than during 2003.
According to the ATA press release, the national annual average price of diesel was $1.81 per gallon or 20 percent higher than the preceding year. The weekly price reached a high of $2.21 on October 25, 2004, which was an all-time high according to the Energy Information Administration, and the national average remained over $2.00 for 11 straight weeks. Prior to 2004, the record high was $1.77 in March 2003. The most expensive region for diesel was the West Coast where diesel prices averaged $2.03 for the year, although all regions saw large increases over 2003 levels.
Total gallons used to move the nation’s freight are projected to have surpassed the 34.6 billion gallons consumed by heavy trucks in 2003, although exact consumption levels by the industry are unknown at this time. It was assumed to be the same in 2004 as the previous year for this analysis. However, since 2004 consumption is likely to be higher than 2003, the total bill will be even larger than $62 billion when both consumption and price effects are considered.
“Crude oil and diesel prices reached their highest level last year, driving up the cost of doing business for trucking companies,” said ATA Chief Economist, Bob Costello. Trucks move nearly 70 percent of all the freight tonnage in the United States, Costello noted and next to labor, fuel is often the highest cost for trucking companies.
“It’s not only the absolute level of diesel prices that hurt trucking companies,” Costello said, “but also the volatility that has emerged in the market. Price volatility increased significantly during 2004, making it more and more difficult for companies to manage this huge cost.”