We’ve all seen the change in gas prices for passenger vehicles, and if you’ve paid attention to economic news, you know crude oil has been at all time lows. The drop in oil prices is part of a trade war between Saudi Arabia and Russia, but it impacts the North American trucking industry.
Lower Prices in the Immediate Future
For long-haul fleets with fuel pricing agreements, the impact of dropping oil prices could be minimal. For other fleets, the change could be fairly immediate. Gasoline prices have dropped dramatically and diesel prices are following in their wake. This means that many fleets can enjoy lower fuel costs for the time being.
It’s important to remember that the price slash of crude oil occurred because of a trade war between Russia and Saudi Arabia, with the Saudis looking to force Russia to negotiate on output and pricing. There’s a good chance Russia will come to the table and prices will go back up again. This is likely a temporary situation.
That being said, cash-strapped fleets may get a temporary reprieve for a month or two, and it’s worth taking advantage of.
Fewer New Trucks Purchased
One outcome of lower prices could mean that fleets put off upgrading to newer trucks. Sales of trucks have slowed over the past several months, and this will certainly not help. Many fleets may decide to keep driving older, less efficient vehicles while fuel is cheap. While this may help in the short-term, it’s important to remember that prices will go back up and a fuel-efficient truck helps a fleet save on costs in the long-term.
Dropping Prices Don’t Help a Cooling Economy
Between trade wars with China and the coronavirus, the economy has been slowing down for a while and may be headed towards a more dramatic drop. If there are fewer cargos to haul, lower fuel prices won’t matter all that much. The savings a fleet experiences now may help you ride the downturn a little longer when it occurs.
One way to save money, regardless of oil prices, is to make your fleet management as efficient as possible with the right tools. Gorilla Safety not only functions as an affordable ELD, but it provides tools to help you lower fuel costs all the time — not just when oil prices change. Ready to make your fleet more efficient and save money in multiple ways? Get started, today.
