2015 has indeed been a kind year for international trucking companies because they can save as much as $24 billion via increased freight quotes, thanks to reduced diesel prices. In fact, the annual fuel savings have been pegged at around $350 million by the American Trucking Associations; 85% of these savings are given directly to the shippers.

The diesel prices have come down from $2.85 to $2.15 a gallon, and this will work in the favour of those shippers who previously resisted the increased freight quotes of trucking companies because they required increases to cover their employees’ healthcare, salaries and new regulations. While previously the decrease in fuel prices did not reflect a better economic growth, this time it’s just the opposite, with the increase in cargo demands from all quarters.

Eric Fuller, chief operating officer for U.S. Xpress Enterprises Inc, said,”If the overall cost for the shipper, which is your rate plus your fuel charge, is going to go down, then they may be a little bit more willing to pay that increase. It definitely won’t hurt our ability to get rate increases.” An increase in the shale formation crude products in American states like Texas have forced the prices of crude to hover at around $61, which is the lowest figure witnessed since the year 2009.

The 3rd quarter of 2014 also witnessed a growth of almost 4% in the U.S. economy, and freight expenses increased to 5% in the 4th quarter, based on the to Cass Information Systems data compiled by Bloomberg. Trucking companies started adding fuel costs in their expenditure since the year 1990 so that they could fight the increase in prices. In most cases, it was the shippers who paid the difference in the prices of the fuel. What these charges didn’t cover, unfortunately, was the money spent in the fuel used for carrying back empty containers and trailers, along with trucks idling by, which amount to 15% of the fuel costs.

The chief economist for the trucking association, Bob Costello, said that diesel is the biggest expense that trucking companies have to keep in mind while giving a freight quote, especially for long hauls. This expense is closely followed by labor charges. The shortage in the number of drivers is currently being negated by offering increased salary prices, with the increase being somewhere around 10%. “We’re just in the beginning stages of a prolonged run for higher driver wages,” he said.

The reduced fuel costs are definitely a boom for shippers, who have been fighting increased freight quotes consistently for so many years. These reductions are less impactful for railroads (whose charges fluctuate on a monthly basis) and more impactful for trucking companies (whose charges fluctuate on a weekly basis).

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