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Fuel costs have an incredibly low short (or even medium) term impact on overall costs. It is a major expense and absolute necessity for these companies to even
by BookmarkSaver 11y ago
Fuel costs have an incredibly low short (or even medium) term impact on overall costs. It is a major expense and absolute necessity for these companies to even operate, they are probably incredibly hedged. It would take years of low prices (with confidence that they will stay low) for it to have a large impact.
- tyingq 11y agoSo, it's a major expense, but would require "years of low prices" to have an impact? Huh? Fuel and "Purchased Transportation" (also indexed to fuel costs) are their two largest cost categories. They pass hedging costs directly via fuel surcharges, which is unrelated to rate hikes. "Both FedEx and UPS reported that fuel costs were down about 35% from the year earlier in their most recent quarter"