Volk Transfer says falling price of diesel good first step towards stabilizing shipping rates

MANKATO, Minn. (KEYC) - The price of diesel is on the decline in the Midwest after the U.S. began peace talks to end the Iran War this June. According to the U.S. Energy Information Administration, the price reached $5.01 on Monday.

Vice President of Operations for Volk Transfer Ben Froehlich says while the falling price is a good first step, it will be a while before it can lead to falling shipping rates and prices at the grocery store.

“We are seeing a slight reduction in fuel cost over the last few weeks, overall, from the last time we’ve talked, we’ve seen a 22% increase in our fuel costs. For us, that equates to $800,000 a year, it’s quite an increase to absorb,” Froehlich said.

In addition to that, due to other industry pressures, some other shipping companies have gone out of business in the past two months, which means Volk had to meet more demand with more expensive fuel costs.

Froehlich says after experiencing those increased expenses across a fleet of 40 drivers, who service 48 states, it may take a while before shipping rates can go back down to pre-war levels.

Travis Horn, a driver and mechanic, says the increased cost over the past two months has affected drivers both in and outside of the vehicle.

“It’s affected everything, how we operate for costs, like I need to get tires on the truck. But sometimes they’ve got to say, ‘hey we had to hold off a little bit, we already spent so much fuel already, we’ve got to wait for the next round to get tires,” Horn said.

Froehlich expects it could take up to four to five months for the oil supply chain to stabilize and shipping rates to get back to a more manageable level.

Click here to download the KEYC News Now app or our KEYC First Alert weather app.