Gas Prices Impact Trucking and Distributing Business Daily

Via KFBB

Fuel is the single largest cost for many trucking and distributing companies. Dave Bertelsen is owner of K&K Trucking in Great Falls. He explains, “anytime the diesel fuel spikes, like it has in the last few months, it really takes a wallop out of our cash flow”.

Each company handles the situation in their own way. Don Pettigrew is a partner in Eagle Beverage based in Great Falls. He says, “our gas usage stays bout the same year in and year out. Of course, costs go up and that’s just something we try to control by being more efficient”.

Eagle Beverage makes deliveries up to 160 miles away. They mostly absorb costs rather than pass it on to their retailers and make internal changes to save their bottom line. Pettigrew says, “we increase our efficiency through asking retailers to stock more in the back, so we don’t have to make as many deliveries”. Proper fleet maintenance also plays a big role. Pettigrew says they do frequent tire pressure checks and other services.

Eagle Beverage has roughly a dozen trucks and a few vans and cars which are taking the brunt of fuel costs. Pettigrew explains, “gas prices are going up a little faster than diesel prices, but diesel prices didn’t go down when everything else did”.

K&K Trucking travels across the country and into Canada, forcing them to track fuel fluctuations in multiple regions on a daily basis. Bertelsen says, “online there’s a couple of different services. We use Internet Truck stop; Pilot Flying J has a couple of websites that you can monitor daily fuel fluctuations in prices”.

Bertelsen deals with high fuel costs by shopping around for the best prices. He says, “we route our drivers. Show them where to fuel up and tell them where to fuel specifically based on fuel pricing”. K&K Trucking also uses a satellite tracking system to ensure drivers are using the most direct routes.

Some high fuel costs are passed on to the K&K customers. Bertelsen says, “we have contracts with varied customers that the fuel surcharge is based on a weekly rate”. That weekly rate comes from a database like Energy Information Administration. However, K&K still has to front a lot of fuel costs since not all customers operate on contract. Plus, the fuel bill comes weekly and often paychecks for jobs arrive months later.