Few industries touch every aspect of the economy more than trucking.
“Everything you are looking at right now, essentially, was on a truck at some point,” said Bill Wettstein, president of Nussbaum Transportation Services in rural Hudson, north of Normal.
Nussbaum is one of the biggest transportation companies in Illinois. Its big semis are all over the country. They travel about 1 million miles per week, mostly delivering supplies to manufacturers. Rivian and Caterpillar are among Nussbaum's biggest clients.
Trucking, flying and farming are among the many industries all trying to ride out the current gas price spikes as its impacts ripple throughout the economy.
Wettstein said the start of the war with Iran was a major sticker shock. He said Nussbaum's diesel costs went up about $160,000 per week. He said gas spikes like that put some trucking companies out of business.
“I know this is causing some angst for some trucking companies and making it hard for some to survive,” Wettstein said.
Wettstein said some trucking companies were already struggling as the post-COVID economy shifted from services to goods, and now it's swung back to services, where trucking is less in demand.
Wettstein said Nussbaum is better off than many smaller trucking companies because Nussbaum builds gas price increases into its delivery contracts. Still, it’s buying the gas weeks before it gets the money back following deliveries.
He acknowledges someone has to pay the higher cost — and ultimately it's the consumer.
“Inflation is high, energy prices are a part of that, so when that happens, it seems like it can be hard for the U.S. economy to grow,” Wettstein said.
Smaller transportation providers that lack the kind of scale to absorb these costs could suffer more.
Bill Imhoff owns Quick Cab Car Service, which does mostly corporate travel in Bloomington-Normal for hotels and hospitals and the like. He said higher gas is just one pain point for his company.
“Insurance has gone up at a crazy amount and it’s because of everything else. They are going to raise prices of everything as gas prices go up. It’s an indicator of where things are headed,” Imhoff said.
Imhoff said it's like pulling teeth to find drivers. Those drivers pay for their own fuel.
“That translates over to less money going in their pockets. That’s been kind of a burden for us, but hopefully it will clear up in time,” Imhoff said.
Airline travel
The airline industry is hoping for some market stability as summer travelers make vacation plans. Carl Olson, director of Central Illinois Regional Airport in Bloomington, said it's too soon to see how much the higher cost of jet fuel and subsequent higher fares may slow airline travel.
“Just like with everybody else in their cars, there’s adding to the decision, ‘Do I really need to take the flight or do I want to pay that higher ticket price?' It is important and it’s serious and we are feeling the same thing that the rest of the community is,” Olson said.
Olson said he's also watching to see if corporate flyers start to buy less of CIRA's jet fuel. He's building that into CIRA's budget.
Car buying
It seems more consumers are waiting longer to put a new car into their budget. And those who are buying, they want fuel-efficiency.
“It’s the hottest topic in your world right now is the hybrid technology,” said Ryan Gremore, president of the O’Brien Auto Team, which operates six car dealerships in Bloomington-Normal.
Gremore said hybrid vehicles, which use both an internal combustion engine and electric power, now make up more than half of all sales for its brands that prioritize hybrid technology: Honda, Hyundai and Kia.
He said hybrids have been a good buy for people who want to go electric but still have range anxiety.
“People tend to lean toward the hybrid, so I don’t have to be yet handcuffed by [electric vehicle] charging, but I can still get something that’s more fuel-efficient as well as something that’s better for the world,” Gremore said.
More drivers are also holding on to their cars longer. The average car on the road is a record 13 years old. Gremore said that's because cars are built to last longer, and some drivers aren't ready to buy until gas — and everything — gets cheaper.
Gremore added his dealerships have increased year-to-year sales, but that's not common across the industry. Gas-powered vehicle sales in the U.S. increased marginally in May after seven consecutive months of declines.
“More people would like to drive a newer car with newer technology, but at the end of the day, there’s a cost to that,” Gremore said, noting the average new car sale in the U.S. has topped $50,000 for the first time. Used cars are now in the $35,000 range. “Because costs have gone up, there are a portion of people who have just waited.”
Agriculture
Waiting has not served farmers well when they need to buy fuel for agriculture equipment.
Austin O'Neall farms corn and soybeans in rural Cooksville east of Bloomington-Normal. O'Neall said he was fortunate to contract for gasoline, road and farm tractor diesel at the start of the year to lock in prices before they rose. Farmers with storage capacity can do that.
But those contracts have lapsed, and now he's buying fuel right off the truck at a much higher cost.
“I’d say we are right now into the multiple thousands of dollars on our operations, the cost difference,” O’Neall said.
O'Neall said he's mostly had to eat the cost and is looking for ways to save money, perhaps by finding another fuel supplier or buying grain from somewhere closer.
“When farmers have their backs up against the wall, it forces us to look for different places to price fuel and different options. It really makes us think about every pass we make through the fields, every load of grain we haul,” O’Neall said.
Feeding the hungry
Higher fuel costs lead to higher food costs, which can be especially hard for seniors and those on a fixed income. LeeAnn Woodmancy runs the Peace Meals program at OSF HealthCare. It serves home-delivered meals to about 500 homebound McLean County seniors and feeds about 1,600 people across a seven-county area. She said those numbers grow every year.
“We do see more of an influx of people coming in, especially with SNAP being effected now,” Woodmancy said, referring to expanded work requirements for SNAP recipients. “Some of these senior citizens cannot afford to get groceries.”
Peace Meals also offers vouchers for restaurants for its clients to get a discounted meal with more social interaction. But more of those clients can't afford to drive with gas well over $4 per gallon so more of them are seeking home delivered meals instead.
“That is one of the things that we look at is do they have enough to be able to drive their car to go to these places and, if they don’t, is public transportation available to them,” Woodmancy said.
Peace Meals pays for its drivers' gas largely with grant funding. It's also relying more on donations, primarily from churches and townships. Woodmancy said Peace Meals also recently started using new software that helps it find more fuel-efficient routes for drivers to make all of their home visits.
When you are driving from Lexington, Illinois, to Lexington, Kentucky, every month, there aren't many ways to cut costs on fuel. Sally Whaley makes that trip in her SUV along with her husband in his box truck every month. They travel about 10 hours roundtrip to deliver food and other supplies to about 30 food pantries in eastern Kentucky. It's through her Servants of Our Lord ministry that partners with Midwest Food Bank.
Whaley said her Toyota Grand Highlander costs about $75 to fill. She looks for any way she can to save a few bucks, tracking prices through the GasBuddy app, using gas tokens from a local car wash, and waiting to get out of Illinois — where the gas tax is higher than its neighbors.
“Sometimes he’ll be ahead of me in the box truck and he’ll just say ‘Hey I had to pull over for gas, it’s cheaper here. Go stop here if you are going to have to stop,” Whaley said.
Whaley said gas prices are a challenge now, but she said they will find a way.
"We have to go every month because these people down there depend on us," she said.
Coming Wednesday: In part 3 of our series Tanking, you’ll learn how higher gas prices are affecting local governments, schools and public transportation.
