Despite evidence that truck drivers are reducing speeds to conserve fuel, supply chain experts say the impact on delivery times should be minimal.
Commercial truck drivers drove 4 percent slower in late April compared with the start of the year, according to a transportation analytics company INRIX, in conjunction with the increase in diesel fuel prices driven by the war in Iran.
Data from the U.S. Energy Information Administration says average diesel fuel prices were $5.35 per gallon, up from $3.81 in the week before the war and up further from $3.48 at the start of January. As trucking companies endure the higher prices at the pump, they can either pass them to the customers in the form of increased freight rates or preserve fuel b driving slower.
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Broderic Fernow, a marketing manager at P-Fleet, a company that provides fuel cards for trucking and transportation companies, said he did not believe the 4 percent reduction in driving speed would have a major impact on shipping times.
“The average over-the-road truck driver travels about 500 miles per day,” Fernow said. “If drivers reduced their average speed by 4 percent, it would only increase driving time by roughly 25 to 30 minutes per day.”
Fernow also noted that truck drivers employed directly by retailer trucking operations are less likely to reduce speed since their employer pays the cost of the fuel. Conversely, drivers for owner-operator trucking companies are more likely to slow down as they typically pay for their own fuel.
The internal analysis from INRIX of more than 60 million fleet trips across 10 major U.S. metros illustrates tighter execution, but no declines in demand. The data did not show a meaningful change in total trip counts, but revealed a small, persistent reduction in average trip length of about 2 percent.
One shipper told Sourcing Journal he remains unconcerned about the impacts to product lead times.
“For import-dependent brands, domestic trucking pace is a small slice of total lead time compared with ocean transit and port dwell,” Ryan Zagata, founder and president of Brooklyn Bicycle Co., a bicycle brand that imports its finished bicycles and sells both DTC and to roughly 450 bike shop partners. “If carriers driving slower buys them fuel margin without degrading on-time performance, most shippers our size will not notice it on the receiving dock.”
Zagata said the slowdowns would impact retail shippers far more in schedule variability than delivery to a store or an end consumer. For example, if a truck misses a dock appointment, that could end up bumping back an appointment between the company and one of its bike shop partners.
“Predictability matters more to us than speed,” Zagata said. “Slower trucks do not break a supply chain; unpredictable trucks do,”
Don White, vice president of refrigerated strategy and solutions at TEN (Transportation Equipment Network), said his trailer leasing company hasn’t seen a broad lengthening of lead times across the board.
“Well-run carriers are building slower speeds into route planning rather than just slowing down mid-route,” said White. “The fleets that are managing this are well-planned for it. The ones feeling the pressure are those running schedules with no cushion, where a slower average speed and a dock delay on either end is enough to create a problem.”
White and Zagata both agreed that multiple issues often compound on each other to exacerbate the problems with slower speeds, whether it be a pickup that runs too long or a dock that isn’t ready.
Lead times also are often dependent on the shipper arranging the freight movement, and their savvy of trucking industry trends, says Overhaul’s executive vice president of strategy David Warrick.
“Carriers have been signaling for weeks that something has to give: either rates, schedules or service levels,” Warrick said. “Shippers who built their planning assumptions around 2024 fuel costs are now working with a reality that’s 40 to 50 percent more expensive. That gap shows up somewhere, and often it shows up in transit time.”
With capacity continuing to exit the market and freight rates already having begun to rise before the increasing fuel costs, Warrick said “slower speeds are just the most visible symptom of a market that was already under pressure before diesel became the headline.”
However, he didn’t see the issue as a speed problem, but rather a control problem, noting that shippers can work around slower transit if they have accurate ETAs and enough lead time to make decisions.
“What they can’t manage well is uncertainty. If they don’t know a load is slipping until it’s already late, they’ve lost most of their options,” Warrick said. “The underlying dynamic is that the cost structure for moving goods in North America has fundamentally reset, and supply chains that were optimized for a lower-cost environment are now showing the strain.”
