Diesel Prices are Causing a Budget Squeeze
Over half (52%) of the logistics professionals we surveyed said that their companies were now spending more than one-fifth of their monthly operating budget on fuel alone.
Fuel is, of course, a core operating expense — and when these start to rise, other things have to give. Recent weather volatility means that preparing for unforeseen circumstances is also becoming a non-negotiable for an increasing number of businesses, so there’s even less spare cash to play with.
This means that, after accounting for these critical priorities, firms often can’t fund strategies needed to deal with longer-term and more persistent challenges impacting the US transport sector at present.
Month-to-Month Pressures Plague Logistics Businesses
In our July survey, we found more evidence that immediate, month-to-month pressures like rising fuel prices have turned many eyes to the here and now, and away from investing in solutions to challenges like driver shortages, which inhibit growth and expansion.
For instance, only 14% of logistics companies are prioritising recruitment and retention, even though 24% listed workplace shortages as their biggest concern. A larger proportion of companies reported that they were prioritizing “vehicle upkeep” (20%) and “managing financial pressures” (17%).
If fuel prices continue to rise, it may make it more difficult for some logistics companies to address longer-term issues — and justify splashing out on solutions.
A slightly smaller percentage (16%) of businesses explained that they were prioritizing adopting new technology, but this number could quickly shrink if budgets continue to be directed towards core operational demands. And, with the tariff uncertainties still looming overhead, there’s every chance they will be.
