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Increased cost of diesel fuel could pump up overall cost of living

Higher delivery costs could eventually be passed along to consumers. Trucking and logistics companies in WNY and around the U.S. are being tested by soaring costs.

BUFFALO, N.Y. — While you may be frustrated over gas prices, have you thought about diesel fuel?

That may pump up our overall cost of living as well since so much of what we buy gets delivered by big trucks, which cost a lot more to operate.

Trucking and logistics companies here in Western New York and around the country are being tested by the soaring costs of diesel fuel, which is about $5.25 a gallon right now. 

Jason Ickert is the President of Sonwil Logistics and Transportation, and he points out that in his firm's fleet, "These trucks hold 300 gallons of fuel, so that would be $1,575."

They typically haul heavy, as he put it. That means 65,000 pounds in payload, and it's up to 100,000 pounds with the truck tractor included. They get about five to six miles a gallon. 

Those higher costs could really hurt some of the independent drivers, and if they're taken out of the supply chain, that will leave a huge gap.

The trucking company executive and supply chain experts, such as professor Mike Braunscheidel of the University at Buffalo School of Management, agree it could make the product delivery flow tighter down the road.

"As those carriers and or drivers begin to fall out of the market, that's going to put a compression on the capacity that we have available to us to move trucks," Ickert said.

Added Braunscheidel: "The independent truckers play a very valuable role in our supply chains, so they're critical to the supply chains as well."

A lot of independent truck operator-owners pulled out in 2007-08. That was the last time we saw a major fuel cost spike that they could not easily plan for.

The bigger companies can use fuel surcharges in contracts to protect them, but who will really pay the freight, as they say.

"We pass it back to our shippers and receivers, and the shippers and receivers then pass it back to the consumers, so ultimately it's going to be an increase that the consumer is gonna see," Ickert said.

Of course, that brings us to the supermarket aisles and other retail outlets. Braunscheidel notes that "different supermarkets have tried to minimize those impacts or what not, but they do have to pass those costs along because they are real costs, because of the diesel fuel prices."

And the professor says let's go back a step even further to down on the farm.

"Think about the farm equipment that uses diesel fuel," Braunscheidel said. "When they're planting and harvesting, and doing all the things that the farmers do, all those things are impacted by the cost of fuel as well, so that impacts the price right at the beginning of the supply chain, if you will ... the food supply chain."

There's another point to consider. Higher priced diesel also fuels train locomotives, which also carry all that freight and various consumer goods across the country. Diesel also runs construction equipment and trucks to build everything.


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