U.S. business activity continues expanding, but rising energy costs have softened trucking “somewhat” in several regions, the Federal Reserve reported.
From late February to early April, several Federal Reserve districts – Cleveland, Richmond, Chicago and Minneapolis – reported that higher fuel costs had forced trucking and shipping firms to install fuel surcharges.
Energy prices could soften consumer demand for the goods provided by trucks, the report noted.
In the Cleveland district, “While surcharges allow shippers to almost entirely eliminate the impact of increases in fuel costs, companies are worried that these increases in shipping costs will eventually dampen demand,” the report said.
Manufacturers in the San Francisco district have said they will “keep production as close as possible to demand,” the report said.
Energy prices have made the Dallas district cautious about its business outlook, the report noted.
Still, Philadelphia’s district indicated increased trucking activity, and several districts reported moderate wage increases in trucking.
In the Cleveland district, wages and shipping rates remain stable except for surcharges, and companies in that district continue to hire drivers and add trucks to their fleets.
The Chicago district reported strong freight, although one analyst indicated some decrease in trucking during the first quarter.