Amid Rising Diesel Costs, Market Trends Fuel Opportunities for Parcel Shippers
The transportation industry has been watching diesel prices surge all year. But back in January, few of us expected diesel fuel to hit a record price of $6.53 in the last full week of September. That’s a staggering 77% increase from just a year ago.
As a solution, some U.S. legislators are calling for a ban on diesel exports But the U.S. actually produces more diesel fuel than our country needs. American refineries are currently running at a 97% utilization rate, producing record outputs of diesel in July.
Record-high diesel process are caused by global, not national, trade issues and shortages stemming from the Iran War and the continuing Ukraine-Russia conflict. Reduced traffic in the Strait of Hormuz, damage to Middle East refineries caused by Iran, and Ukrainian attacks on Russian refineries represent a “perfect storm” that’s reduced diesel supply and driven up worldwide pricing.
Unfortunately, this storm is unlikely to end soon. As the winter heating season begins in the Northern Hemisphere, that new demand will exacerbate the global shortage of crude oil over the coming months. And building new refining capacity is a lengthy and extremely expensive proposition.
When every mile counts, shippers must move smarter
With no end in sight, it’s time for shippers to adapt to record-high fuel prices as profitably as they can. Redwood can help by fueling smart, rapid pivots to changing transportation conditions, including diesel costs. As a modern 4PL, Redwood provides a full range of services and support, with no vested interest in a single solution.
Backed by decades of experience — and hundreds of customer success stories — Redwood delivers customized support for every shipper. We help you get the most out of every mile and every gallon of diesel, whether that means consolidating loads, optimizing routes, switching up the carrier mix, negotiating better contracts, or driving broad innovations via business intelligence and analytics.
We manage transportation, broker freight, and provide warehousing space. But we also help reconfigure the supply chain, specify and install digital solutions, and launch cross-border logistics efforts. Here’s a quick look at the ways we’re helping customers move faster and more intelligently in today’s high-cost, high-pressure landscape.
Managed transportation: Leave the driving to us
As fuel prices escalate, more companies are realizing that managing their own transportation networks is a cost-intensive proposition. That’s why Redwood’s managed transportation team has taken the wheel for more than 300 companies, delivering an average 15% cost savings.
With over $1 billion in managed freight, Redwood has built a flexible, multimodal fleet that covers full truckload, less-than-truckload (LTL), and parcel — as well as special needs like project logistics, cold chain, and international shipping. We’ve invested in physical capacity, so you don’t have to.
Beyond privately owned assets, Redwood has access to diverse equipment, carriers, and AI-enabled transportation management software that links directly to your operations. Redwood helps make your load lighter — but you always remain in control, with real-time visibility of every shipment.
Freight brokerage: Capitalize on our pricing leverage
For LTL shippers, the impact of the diesel fuel shortage can be summed up in one word: surcharge.
While skyrocketing fuel costs get all the attention, carrier fuel surcharges are equally important. Unlike fuel — which is traded globally and has fairly standardized pricing — fuel surcharges are a flexible pricing mechanism that varies widely by carrier. Shippers must pay these fees with little understanding of how they were calculated — and little power to negotiate.
That’s where Redwood comes in. As a leading freight broker in North America, Redwood negotiates its own fuel surcharge table with a vetted network of carriers. Redwood’s fuel surcharge table changes less frequently than carrier rate tables, and it’s calculated at a much lower percentage — because it’s based on our large customer volumes and buying leverage.
Even in more stable years like 2023, 2024, and 2025, Redwood’s fuel table has been proven to cut carrier surcharges in half. In 2025, some shippers paid a fuel surcharge as high as 31.72%, while Redwood customer surcharges were capped at 14%.
In the first nine months of 2026, Redwood customers have saved tens of thousands of dollars by utilizing Redwood’s LTL pricing, even as diesel fuel costs were steadily climbing.
Visibility and reporting: Knowledge is power
It takes roughly the same amount of fuel to move a half-empty trailer and a full one. How efficiently are you using your available space? Are you consolidating loads, shifting among multiple modes, and optimizing routes? All these best practices can save millions on fuel costs over time.
You have all the data you need to optimize your transportation processes and fuel usage. But if you’re like most logistics teams, there’s simply too much data and not enough time — or you don’t have the right skillsets in-house.
Redwood’s visibility and reporting experts can assemble your gigabytes of data, including order volumes, past transactions, carrier costs, and payload metadata — then turn that raw data into actionable insights. You can explore new routes, modes, and carriers with a high degree of confidence, because you’re working from facts.
Redwood’s supply chain advisory team takes a higher-level look at your overall network. Should you move products closer to customers? Consolidate warehouses? Switch to a managed approach for transportation and distribution? Install AI-enabled decision tools? It’s hard to address the bigger picture when you’re struggling to protect the bottom line. But these kinds of strategic moves can pay enormous financial rewards, in part by cutting miles and fuel.
Counting your fuel costs? Count on Redwood.
It’s hard to accept the reality that diesel fuel prices will continue to push higher, likely setting new records. And it’s easy to feel like you don’t have any control. There’s no easy answer, and no one-size-fits-all answer that meets the needs of every shipper.
But Redwood offers customized services and solutions that maximize your control, as well as your ability to move smarter, no matter what the future brings. At Redwood, we help you keep your options open — and your margins as high as possible in a tough transportation climate. Contact us to learn more.
