What a 10-Cent Gas Hike Could Mean to Your Business
Fuel costs are one of the main expenses for trucking companies – just behind labor costs. However, proposed federal legislation that would increase the gas tax by 10 cents to fund federal transportation projects is largely supported by the general public, according to polls. But what could this proposed gas hike mean for your transportation business? Check out the possible effects of fuel costs on trucking companies:
Increased Operating Costs
Since fuel is such an integral operating expense, price changes can make a big difference to your bottom line. A gas hike will make it cost more to get and keep your trucks on the road, resulting in your profits being reduced. An increase in an already major operating expense may also require the need to readjust and cut back the company’s budget in other areas, which may lower both employee and customer satisfaction.
Truck driving is a tough job, but many drivers are willing to accept the long hours away from home because of the compensation. If your drivers are having to spend more money on fuel when they’re out on the road, they may become frustrated if their take-home pay ends up taking a hit. With a truck driver shortage that has no end in sight, retention is a high priority. Retention can also be negatively affected if your company ends up cutting assignments or other cost-savings maneuvers that make your truck drivers want to change careers.
Passing on the increase in operating costs to customers is not generally a transportation company’s first choice, but it may come down to that. When the cost of doing business goes up because of gas hikes, your company may be forced to charge more for your services. This may make your customer base unhappy and willing to look elsewhere for their transportation needs. If this is unavoidable because of the nature of their products, they may end up increasing their own charges and passing them onto consumers.
Get high-quality drivers on your team in a cost-effective manner – turn to Contracted Driver Services. As a specialized staffing firm for transportation and supply chain industries since 2001, we have worked for over 500 clients nationwide to help streamline their hiring processes, reduce administrative costs, and get candidates quickly on the road. Learn more about the services CDS provides employers.