Since Russia invaded Ukraine in March, markets have been uncertain, oil futures have skyrocketed, and the general state of business — both international and domestic — has been a bit rocky.
But with diesel prices still averaging above $5 a gallon and gasoline above $4, some of the nation’s lawmakers are saying that oil companies may be more to blame for the business climate than the war.
House Democrats in early April accused oil companies of “ripping off the American people” and putting profits before production as Americans suffer from ever-increasing fuel prices during the war in Ukraine.
“At a time of record profits, Big Oil is refusing to increase production to provide the American people some much needed relief at the gas pump,” said Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce Committee.
At the time of this writing, there are fears that Russia could begin escalating the war after an initial failure on its part to gain control of Ukraine.
Moscow’s invasion stalled on several fronts as it met with stiff resistance from Ukrainian forces, which prevented the Russians from taking the capital and other cities.
With their offensive thwarted in many parts of the country, Russian forces have relied increasingly on bombarding cities. The war has left many urban areas flattened, killed thousands of people, and left Russia politically and economically isolated. The war has also shattered Ukraine’s economy, with the World Bank estimating it will shrink by more than 45% this year.
Meanwhile, those in the trucking industry are watching and hoping for peace.
There are also worries that the war could further impact North American supply chains and the freight logistics sector. More than 90% of the U.S. market’s supply of neon, which is crucial for semiconductor chips, comes from Ukraine.
The White House has said it is eager to see chip manufacturers turn to other sources, but that could take time.
Semiconductor chips are vital to Class 8 tractors, and slowdowns in chip manufacturing have slowed down Class 8 manufacturing in the U.S.
Semiconductor chips collect data in a tractor, and between 15 to 35 chips can be needed per tractor, according to Freight Transportation Research (FTR) Associates’ Vice President of Commercial Vehicles Don Ake.
The global supply chain crisis and two fires in major chip factories abroad — one in late 2020 and one in early 2021 — had already hit the market hard. Now the conflict in Ukraine threatens to cause another wave of issues in North American trucking.
The latest release of ACT’s For-Hire Trucking Index, with February 2022 data, showed decreases in the volume and pricing indices, while the capacity index grew.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat activity level is 50.
“The volume index fell 1.7 points in February, in line with our revised GDP forecasts for 2022, as inflation weighs on consumers’ wallets,” noted ACT Research’s Research Associate Carter Vieth. “The freight volume outlook remains positive, but COVID variants and the inflationary effects of war cast some uncertainty.”
But what about everyday drivers? How are they fairing through this latest crisis?
D. Caldwell, an over-the-road driver from Arkansas, said he has had to make cutbacks in order to afford fuel. As an independent owner-operator, he said that times are “definitely getting tougher.”
“Fuel is real bad high right now,” said Caldwell. “And you look at what’s going on over in Ukraine, you just have to think that something worse may be coming. I try to look on the bright side of things, but sometimes there just seems to be all dark, you know? But I have faith that things will get better at some point. They got to.”
There was, indeed, some glimmer of hope on April 11 after the U.S. Department of Transportation said there are signs of progress in the nation’s supply chain.
America’s ports — including the Ports of Los Angeles and Long Beach collectively — imported more containers than any previous January, according to a USDOT news release.
The total number of container ships waiting for berths at U.S. ports has dropped by 35% since peaking in early February and freight railroads’ weekly intermodal movements in March approached their highest levels of 2022.
“Goods are successfully being delivered to shelves and real retail inventories excluding autos are at their highest levels in history and 6% above pre-pandemic levels,” according to a news release.
One key bottleneck in the transportation supply chain has been trucking capacity — an industry where employment was declining before the pandemic and has been stretched by historic demand for goods.
In early April, the U.S. Department of Transportation (DOT) and the U.S. Department of Labor (DOL) announced progress on the Biden-Harris Trucking Action Plan to focus on retaining drivers by making truck driving a better job and to recruit more drivers into the profession.
Key achievements include more than 90 employers launching Registered Apprenticeship programs in 90 days, a 112% increase in commercial driver’s licenses issued in January and February 2022 compared to 2021, a new Women of Trucking Advisory Board, and a new Veterans Trucking Task Force to help bring more veterans into the trucking industry.
Trucking employment is now around 30,000 higher than the start of the pandemic.
“While this is important progress, we still see challenges on the horizon and USDOT continues to monitor potential disruptions,” the DOT news release noted.
Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.
