Rising Diesel Prices May Delay Truck Fleet Renewal
By Stewart Burnett
Record diesel prices are presenting challenges for trucking companies across the U.S. and Europe, according to Daimler Truck’s CEO, Karin Rådström. While many companies can transfer these costs to clients, operational cash flow issues remain significant. Operators must pay for fuel upfront before receiving reimbursements, which creates financial strain.
As of September 14, U.S. diesel prices soared past $6 a gallon, a 60% increase attributed to the ongoing Iran conflict. Diesel’s price rise outpaces gasoline due to steady demand in freight, agriculture, and shipping sectors, which cannot reduce consumption as easily as consumer driving. Additionally, diesel competes with jet fuel and heating oil for limited refining capacity.
North America is Daimler Truck’s largest market, contributing almost half of its sales through Freightliner and Western Star brands. The rapid increase in diesel prices disproportionately affects the company compared to its European-focused competitors.
Although Rådström reported no immediate impact on order volumes, the uncertainty surrounding fuel prices is detrimental to business. Fuel costs account for 25% to 35% of trucking operating expenses, making it the second-largest cost after labor. Consequently, many freight contracts include fuel surcharges, allowing operators to eventually recoup costs but necessitating upfront payments that could take up to 60 days to reimburse.
In contrast to passenger car markets—where consumers quickly react to rising fuel prices—fleet operators tend to delay fleet renewal. Stellantis Europe’s Emanuele Cappellano noted that trucking companies often choose to extend the life of existing fleets rather than risk investing in electric vehicles amid uncertain costs.
High diesel prices might hinder truck fleet turnover instead of accelerating a transition to electric models, which is the opposite of trends seen in passenger vehicles.
Mercedes-Benz Trucks’ Achim Puchert offered a brighter viewpoint, suggesting that sustained high fuel costs could eventually make battery-electric trucks more appealing on a cost-per-mile basis. However, the high upfront cost of electric trucks—two to three times that of diesel models—remains a significant barrier.
Both Daimler and Stellantis emphasized that lacking charging infrastructure, rather than vehicle costs or technology, is the main obstacle to adopting electric trucks. They advocate for changes to EU regulations that penalize manufacturers for not meeting emissions targets. Currently, electric trucks make up just 2% of newly registered commercial vehicles in Europe, far below the EU’s goal of 35% by 2030.
In response, Daimler has begun developing its own charging infrastructure through its Milence joint venture with Volvo and Traton, as well as its TruckCharge division for depot installations. This strategy indicates that Daimler does not rely solely on regulators or utilities to address charging shortages, viewing infrastructure as a competitive advantage while also asserting that EU emissions penalties overlook the infrastructure gap.
