Date: Friday, May 14, 2021
Source: Wall Street Journal
Prices are rising for diesel fuel used to transport freight as fallout from the Colonial Pipeline shutdown strains capacity for truckers that deliver fuel to gas stations.
Average national diesel prices that were already on the upswing rose by 4.4 cents a gallon over the past week to $3.136 a gallon on Wednesday, according to AAA data, and some trucking companies said they were bracing for supply disruptions and trying to secure fuel to keep operations running.
Colonial Pipeline Co. said Wednesday it has begun to restart operations after shutting off the conduit following a cyberattack last week. Truckers that haul fuel said earlier that it would take time to restock tanks.
“Product moves through the pipeline very slowly, like a few miles an hour…It’s not a gush,” said David Price, chief operating officer of United Petroleum Transports Inc., based in Oklahoma City.
Chattanooga, Tenn.-based Covenant Logistics Group Inc. said it was watching markets in Virginia, Georgia, North Carolina and South Carolina closely, and that it anticipated diesel shortages could begin later this week if supplies aren’t replenished. The truckload carrier also said it had only experienced limited problems so far and was “working hard with our fleets to make sure if they are headed into those areas, that they are topped off as best as possible.”
Saia Inc., a less-than-truckload operator based in Johns Creek, Ga., was working with fuel providers to secure loads for its bulk fueling tanks and stations, and was “continuously monitoring the fuel situation,” Chief Executive Fritz Holzgrefe said. Saia is using its network of bulk-fuel providers and commercial fueling stations to provide off-site fueling options for drivers “where necessary and available,” he added.
Covenant and Saia spoke before Colonial said it was restarting operations.
Diesel remains generally available even as panic buying by drivers fearing shortages has propelled gasoline prices higher and depleted gas supplies across states including Virginia, Georgia, North Carolina and South Carolina.
Truck-stop operators are leaning on suppliers and bringing in fuel from other markets, with some reporting sporadic supply disruptions before the pipeline restarted operations.
Pilot Co. was experiencing fuel outages at some locations in the Southeast and is encouraging people “to not panic buy or hoard fuel” as the company works to keep supplies flowing to those regions, Brad Jenkins, Pilot’s senior vice president of supply and distribution, said Wednesday. “This will help the supply chain to better keep up with demand.”
TravelCenters of America Inc., the largest publicly traded U.S. truck-stop operator, said Wednesday it was seeing “intermittent supply outages at sites and may be limiting the amount of gallons per purchase depending on location.”
TravelCenters also said it was working with suppliers to bring in fuel from other markets “to help minimize any potential disruptions.”
Meanwhile, tanker fleets that deliver fuel to gas stations said surging demand from panicked consumers is outstripping their ability to restock local supplies in some areas served by the Colonial Pipeline, with problems rippling farther out as truckers travel longer distances to resupply customers.
Those operators said they have limited capacity to increase deliveries, in part because they have had difficulty recruiting drivers in recent months. Tanker trucks also are sometimes making longer trips to refill after deliveries when local supplies served by the pipeline are depleted.
Some customers in the Southeast are selling “more than double the amount of gallons per hour that they would normally sell…We just don’t have the capacity to deliver double the amount of fuel we were last week,” Rob Sandlin, chief executive of Patriot Transportation Holding Inc. said Wednesday morning. The company owns fuel hauler Florida Rock & Tank Lines Inc., which serves customers from Florida to Georgia and parts of Tennessee and Alabama.
Mr. Sandlin said the limited trucking capacity means his customers are giving priority to some locations over others as they would during hurricanes to make sure gas stations along evacuation routes stay supplied. “So far we have only seen a few issues where diesel was not in supply so we are topping our storage tanks off daily,” he said.