Trent Cotney, CEO, Cotney Attorneys & Consultants
From coast to coast, the construction industry is feeling the squeeze from inflated material costs. These increased prices can be traced to continuing effects of the COVID-19 pandemic, as some manufacturers periodically had to close down, production slowed and transportation restrictions hobbled distribution. But in recent months, prices are continuing to climb higher, due in large part to a scarcity of materials, an increase in diesel fuel costs and a shortage of truck drivers.
Diesel fuel prices are on the rise as the cost of crude oil continues to jump (now $60 a barrel, up from $37 a year ago). The per-gallon diesel price in March was $3.07, up 22 cents from last spring. These elevated prices are bad news for the trucking industry since fuel accounts for 39 percent of its total operating expenditures. The trucking industry, which moves and delivers more than 70 percent of the freight in the United States, is facing further bad news. It relies on more than 3.5 million drivers to keep the process running, but it is experiencing a driver shortage. This year, that shortfall is estimated to be about 60,800 and some expect that driver deficit to escalate to 160,000 by 2028.
This combination of higher fuel costs and fewer truck drivers is contributing to increased freight costs, which results in pumped-up price tags for all kinds of materials. To protect yourself and your company, here are some steps to take: Read More.