As the holiday season approaches, it’s not Santa who gives presents to all Americans. It’s truck drivers.
Unfortunately, many truck drivers and trucking companies are concerned about their ability to operate due to historically low levels of diesel fuel. Political instability and international relations have exacerbated these problems.
As the price of diesel rises, owner-operators and trucking companies must charge more for hauling freight. This is especially onerous for owner-operators who bid on individual jobs.
If the situation were to continue, many in the trucking industry are concerned that only the big players could survive this situation. Similar to large corporations that can weather lower revenue for a quarter, many smaller companies rely on a perpetual stream of income to keep the doors open and the trucks running.
The Biden Administration has been releasing diesel from the strategic reserves, but this supply is rapidly depleting.
As of October 14th, the US had only 25 days left of reserve diesel supply. The reserve of diesel hasn’t been that low since 2008.
Many mainstream outlets have commented that rising oil prices could affect the midterms, which gives the Administration an incentive to continue releasing the reserves until December. But what happens after the midterms, in 2023, if the reserve is no longer being tapped? What happens when it runs out?
National Economic Council Director Brian Deese spoke to Bloomberg TV, where he said that the reserve is “unacceptably low” and “all options are on the table” to address the diesel shortage.
Whatever happens, truck drivers and trucking companies will feel the crunch.