Impact of Skyrocketing Fuel Prices on Forest Products Transportation

The following was recently published by the Forest Resources Association. It was authored by Charlie Blinn, Professor, U of MN, Dept. of Forest Resources and reviewed by Tim O’Hara, FRA Vice President of Government Affairs and Lake States Region Manager.

July 7, 2022 - Rising fuel prices impact everyone’s pocketbook through increased costs which are driving up prices. This increase in cost is especially true for the trucking industry, which is critical to maintaining the supply chain and is often viewed as a barometer of the U.S. economy. While 2020 data from the U.S. Department of Energy Alternative Fuels Data Center shows that the average fuel economy for cars was 24.2 miles/gallon, it was 5.29 miles/gallon for heavy trucks with a gross vehicle weight rating exceeding 33,000 pounds, such as a 5-axle tractor-trailer log truck. As trucks are vital for moving raw forest products from in-woods harvest sites to mill consumers, rising fuel prices significantly impact the cost of those deliveries.

Recent news events have highlighted the impacts of increasing fuel costs on the economy. To get a better understanding of that impact on the transportation of raw forest products from in-woods operations to the mill, online data were used to look at the history of diesel fuel prices over the past 15 years as well as the impact of rising diesel prices on log trucks and delivered wood today.

Historic View of Diesel Prices Since 2007

Across the entire U.S., No. 2 diesel retail prices generally were within the range of $2 – $4/gallon between 2007-2021 (Figure 1). During mid-June 2019, the average retail price for No. 2 diesel across the U.S. was $3.105/gallon before falling to $2.396/gallon during the same week in 2020 as consumption dropped due to falling demand and rising supplies during the beginning of the Covid-19 pandemic. In response to rising demand worldwide, changes in U.S. energy policy reduced domestic production and by OPEC, along with Russia’s invasion of Ukraine, the average price rose to $3.286/gallon in mid-June 2021 and to $5.718/gallon today.

The complete article with tables and graphs is available on Forest Resources Association website:

SOURCE: Forest Resources Association