AFTER SEPTEMBER 2: HOW ARE FUEL PRICE FLUCTUATIONS AFFECTING LOGISTICS AND FREIGHT TRANSPORTATION?

Following the September 2 holiday, fuel prices in Vietnam have continued to attract attention from the transportation and logistics industry. While gasoline prices have increased, diesel prices have moved in the opposite direction, creating different impacts across the freight transportation sector.

For transportation companies, fuel is one of the largest operating expenses, particularly for road freight, heavy-duty trucks, and container vehicles. Therefore, every change in fuel prices can directly affect operating costs, freight rates, and overall business efficiency.

However, fuel prices are not the only factor determining transportation costs. Labor expenses, vehicle depreciation, maintenance, road tolls, terminal and warehouse fees, waiting time, empty runs, and vehicle utilization rates all contribute significantly to the overall cost of logistics operations.

This raises an important question:

IF FUEL PRICES FALL, WILL FREIGHT RATES FALL AS WELL?

The answer is not necessarily.

According to logistics experts, fuel can account for around 30–40% of total vehicle operating costs, particularly for heavy trucks and container vehicles. As a result, significant fluctuations in fuel prices can have a substantial impact on transportation costs and profit margins.

However, fuel represents only one component of the overall cost structure.

Labor, depreciation, maintenance, toll fees, parking and terminal charges, waiting time, empty vehicle movements, and load utilization also have a direct impact on freight rates.

Therefore, a 10% increase in fuel prices does not necessarily mean that freight rates will rise by 10%. Likewise, a decrease in fuel prices does not automatically translate into an immediate reduction in transportation charges.

One important factor is the time lag between changes in input costs and freight rate adjustments.

For transportation contracts negotiated on a monthly or quarterly basis, companies may have to absorb higher operating costs for a certain period in order to maintain contracts and long-term customer relationships.

This can create considerable pressure, particularly for transportation companies operating on narrow profit margins or relying heavily on fixed routes.

FROM FUEL PRICES TO PRODUCT PRICES: THE IMPACT GOES BEYOND TRANSPORTATION

Fuel price fluctuations affect logistics through a connected chain of costs.

When fuel prices rise, vehicle operating costs increase. Higher costs per shipment put pressure on transportation expenses. If freight rates are subsequently adjusted, logistics costs for importers, exporters, manufacturers, distributors, and retailers may also increase.

Ultimately, part of these additional costs may be reflected in the final price of goods.

However, the level of impact varies depending on the type of cargo, transportation mode, delivery distance, and the ability of each business to optimize its supply chain.

For goods transported over long distances and heavily dependent on road freight, the impact of fuel price fluctuations tends to be more significant.

In contrast, businesses capable of combining road transportation with sea, rail, or inland waterway transport may have greater flexibility in managing logistics costs.

A KEY CONCERN: VIETNAM’S LOGISTICS SECTOR REMAINS HIGHLY DEPENDENT ON ROAD TRANSPORT

According to information cited in the article, transportation costs currently account for approximately 50–60% of total logistics costs, while road transportation handles more than 70% of the country’s freight volume.

These figures highlight why fuel price fluctuations can put significant pressure on the entire supply chain.

As long as road transportation remains dominant, logistics companies will inevitably remain exposed to changes in fuel prices.

External factors such as global oil price movements, geopolitical tensions, supply disruptions, and instability along international shipping routes can also trigger new cost shocks.

Therefore, the fuel price story after September 2 is not simply about whether gasoline or diesel prices are rising or falling.

It raises a broader question:

HOW CAN VIETNAM’S LOGISTICS INDUSTRY REDUCE ITS DEPENDENCE ON A SINGLE TRANSPORTATION MODE AND STRENGTHEN ITS RESILIENCE AGAINST COST FLUCTUATIONS?

OPTIMIZING LOGISTICS: IT IS NOT JUST ABOUT REDUCING FUEL COSTS

In an environment where input costs continue to fluctuate, logistics companies need to shift their focus from simply “responding to fuel prices” toward optimizing their entire operational process.

Route optimization, reducing empty runs, improving vehicle utilization, using technology to manage fleets, minimizing waiting time, and strengthening connections between different transportation modes can all help reduce the cost per shipment.

In the long term, developing multimodal transportation is also considered an important strategy to reduce pressure on road infrastructure, optimize costs, and strengthen supply chain resilience.

For importers and exporters, choosing a logistics partner capable of providing flexible transportation solutions, integrating multiple transportation modes, and optimizing every stage of the journey will become increasingly important.

FUEL PRICES MAY RISE OR FALL FROM ONE PRICE-SETTING PERIOD TO ANOTHER, BUT THE CHALLENGE OF OPTIMIZING LOGISTICS COSTS IS HERE TO STAY.

As supply chains face an increasing number of unpredictable challenges, the ability to control costs and proactively develop transportation solutions will become one of the key factors determining a company’s competitiveness.

INTERLINK – KEEPING BUSINESSES UPDATED ON MARKET DEVELOPMENTS AND SUPPORTING THEM IN OPTIMIZING THEIR SUPPLY CHAINS.