Energy sector faces heavy-haul equipment shortages and fuel volatility

How to manage high fuel prices

Because of the ongoing conflict in the Middle East, energy sector shippers are increasingly concerned about fuel price volatility for their own logistics and are re-evaluating all-in rate agreements. Many are looking to break out fuel separately in new freight bids rather than bundling it into fixed rates. This comes at a time when U.S. trucking capacity overall is tightening, so some shippers that previously secured cost commitments are now facing higher rates regardless of fuel.

Considerations for energy shippers

While budget certainty may not be possible, these practices can help insulate energy supply chains from volatility and support more reliable capacity commitments:

• If incorporating an adjustable fuel charge into a freight contract, use a standardized fuel index such as the U.S. Energy Information Administration benchmark.
• Focus bid negotiations on the linehaul portion of the rate to maintain fair comparisons.
• If you haven’t already, develop a carrier/broker scorecard and consider on-time performance and other service-related factors in bid negotiations.
• As capacity tightens, tender acceptance and the size of the carrier network you can access should be a consideration in awarding freight. A lower rate on paper is less meaningful than the rate you’ll pay if your contract freight keeps getting pushed into the spot market.

Data centers and batteries drive heavy-haul crunch

The data center boom and battery needs for industrial power are coming together with high fuel prices and tighter trucking capacity to create challenges in heavy-haul shipments for the energy sector.

What’s going on

• As U.S. policy shifts away from electric vehicles, battery makers are increasingly shifting toward large battery energy storage units, which can exceed 100,000 pounds. Meanwhile, data center construction requires lots of heavy items including generators, transformers, and these energy storage units.
• Access to specialized heavy haul fleets requires long-term commitments, while data center builds are by nature more project-based. As a result, transportation plans are increasingly challenged by shortages of specialized equipment.
• Flatbed and step‑deck capacity is especially constrained, and availability declines further for oversized and heavy-haul freight. Battery energy storage and related sectors are feeling these constraints most acutely, as the supply of specialized assets has not kept pace with demand.
• Fuel can represent a larger share of operating costs in heavy haul, roughly 28–30% compared with 18–22% for standard loads.

What to consider 

• Treat heavy hauls strategically, not as spot market moves.
• For moving critical items like battery energy storage units, transformers, and generators, availability of transportation capacity rather than price is often the more critical factor. Successful shippers plan around schedule, service, and security first, with pricing as a secondary consideration.
• Plan heavy haul capacity earlier and lock it in longer. Heavy haul and specialized fleets operate with minimal slack. Engaging your logistics provider early and shifting from project‑by‑project to longer‑term commitments improves access to scarce equipment.
• Build optionality into your transportation strategy. Relying on a narrow set of specialized carriers increases risk in a tightening market. Working with a logistics provider that maintains access to multiple qualified fleets helps keep your freight and your projects on time.

New battery tech offers more options for grid storage

Lithium remains king in the world of batteries, but alternative technologies such as sodium, zinc, and iron-air are on the rise.

What to know

• These technologies are real. Although lithium-ion batteries will be dominant for the foreseeable future, alternative battery makers have signed deals with major clients and projects are moving forward.
• Lithium-ion batteries are regulated as Class 9 hazardous materials, and while some exemptions apply in certain contexts, accidents can be costly because of fire risk and compliance requirements remain significant. The new battery technologies are either non-flammable or significantly less reactive.
• The newer battery types are heavier. This means they require the same heavy-haul trucking capacity that other bulky energy equipment is competing for.

Domestic oil producers reluctant to invest

Despite higher oil prices, uncertainty around global politics and future market conditions is leading domestic oil operators to move cautiously.

What to know

• In general, oil and gas players are taking a wait‑and‑see approach to new investments. While prices may support additional drilling or development, there are too many geopolitical unknowns to commit significant capital.
• This hesitancy is reinforced by the slow and deliberate decision‑making processes of large companies, which can delay activity even when market signals are favorable. For now, large investments in increased production are not on the horizon.
• Medium‑sized operators tend to make decisions more quickly and pivot faster in response to market conditions. In an otherwise cautious environment, they may represent a more immediate opportunity for the makers of oil country tubular goods and other suppliers to the industry.

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