When the price of fuel goes up, two things change in our logistics. Routing tightens. Customer geography narrows. The 2023–24 fuel cycle drove both of those changes and they showed up in our average delivery distance.
The numbers
Average per-gallon Class-8 diesel in our service area was $4.86 in CY2022, $5.41 in CY2023, and $4.92 in CY2024. The peak of $5.41 in late 2023 was about 17% above 2022. Our average delivery distance per tote fell from 312 miles in 2022 to 277 miles in 2024.
What we did
We reweighted our routing to consolidate aggressively. A partial load that used to go straight out the door now waits up to 36 hours for another nearby order. Customers got an explanation. Almost everyone was fine with it. About 8% of customers asked for a price discount for the wait; we gave it.
We also stopped chasing some customers in the long-tail of our service area. We did not announce that. We did selectively raise freight quotes for shipments over 600 miles, and let market pricing decide whether those still penciled. About a third of the long-haul business chose to walk; about two-thirds stayed.
What we noticed about behavior
When fuel rises, our customers care more about freight than about tote price. The conversation shifts. A customer who was negotiating for a $4 discount on a tote becomes a customer who wants to bundle their order with a neighbor’s to halve the freight. We started actively offering to facilitate those bundles. Several customers met each other through us. A few have continued to bundle independently.
What we are watching
Renewable diesel (R99) is starting to make economic sense at certain pumps in the upper Midwest. We expect to put one of our nine trucks on an R99 contract by the end of 2026. If that works, more.