Earlier this month, diesel prices hit a 13-month high of $2.49 per gallon. Diesel prices have been climbing for a while now, forcing trucking companies and independent drivers to tighten their belts and consider shifting their billing practices.
Hitting The Trucking Industry Right In The Budget
It is no big secret that the trucking industry runs on diesel. However, with fuel expenses comprising up to 40 percent of the average fleet’s budget, rising diesel prices have really taken a hit. Many fleets are considering increasing the amount they charge customers, until the prices start to level off or drop again. This is not the best move, because the majority of the trucking industry offers flat shipping to provide savings to clients, with the cost of fuel rolled into the charge. Others are looking ahead to electric trucks, but, as we reported a little while ago, that solution will not be available until 2020, at the earliest. Ultimately, the increase in diesel prices as made many truckers and fleet owners realize that the regular lag in payments from open invoices has placed an even greater strain on business finances and operational expenses.
Is There An End In Sight For High Diesel Prices?
Historically, all is not bleak. Diesel prices are still 50 percent lower than their all-time high in 2008. But with oil producing nations, such as Russia, threatening to reduce diesel production, earlier this month, smaller fleets are expected to report lower lower profits and overall revenue going into 2017. Many are looking for a solution which will help maintain operations, and even offer growth potential, while avoiding any severe strain on cash flow. Many smaller fleets are have relatively slim profit margins to begin with, and having to budget for the cost of diesel, while payments trickle in from open invoices, and make the outlook worse. Some smaller fleets and independent drivers have found alternatives which allow them to bolster their cash reserves by using freight factoring services to clear out their backlog of invoices and convert them to cash instantly, while doing the same with invoices moving forward.
Express Freight Finance Can Help
If you are in the trucking industry, and either own a fleet or work as an independent driver, we can help ensure you have a steady cash flow to weather rising diesel prices. Our freight factoring services eliminate the waiting period for customer payments and convert your open invoices to the capital you need, within 24 hours. Contact our offices to learn more about how you can keep your trucking business on track with our financing services.