Driver Shortage Stresses Fuel Supply Chain
(Bloomberg) -- Drivers encountering fuel shortages in parts of the U.S. East and South may find it takes weeks before supply levels return to normal.
Now that Colonial Pipeline Co. has resumed deliveries that were halted for nearly a week by a cyberattack, the industry is facing a new logistics problem on top of the lack of available fuel: not enough truck drivers to transport gasoline and diesel from distribution hubs to retail outlets.
While filling station outages fell slightly in South Carolina, Georgia and Tennessee on Friday, about half of each state’s outlets are still without fuel, according to retail-tracker GasBuddy. In North Carolina, about 65% of stations lack supply.
“Too many stations need fuel, not enough capacity at the rack, not enough truck drivers,” Patrick DeHaan, head of petroleum analysis at GasBuddy, said on Twitter, reeling off the factors behind the shortages. He said it will take a few weeks for a recovery.
Colonial Pipeline Co. paid nearly $5 million to Eastern European hackers to end a ransomware attack that shut its network of pipelines that transport gasoline, diesel and jet fuel along the U.S. East Coast. The outage, which occurred just weeks before the kickoff of summer driving season, left some retail stations dry in more than 10 states and pushed the average national pump price above $3 a gallon for the first time in six years.
As of Friday afternoon, fuel flowing out of Houston toward the Southeast on Colonial’s system remained at less than half of capacity, according to people familiar with the matter. A little more than 14,000 stations are still without fuel in the affected areas of the U.S., down from a peak of about 16,200, according to GasBuddy.
One of North America’s biggest distributors said the shortages will drag on because of the lack of tanker trucks to haul supplies.
“It’s really going to be probably seven to 10 days before the average consumer really notices a noticeable improvement” in local supplies, said Andy Milton, senior vice president of supply at Mansfield Energy Corp., whose closely held company handles more than 3 billion gallons of fuel a year across the U.S. and Canada.
Mansfield has brought trucks to areas affected by shortages from as far away as Minnesota and Texas.
“The truck itself becomes the major, the major problem,” Milton said.
Many truck drivers stopped hauling fuel during the pandemic when gasoline demand collapsed. Now, companies are rushing to hire them back. As recently as last week, Pilot Corp. was offering $5,000 hiring bonuses for tanker drivers to supply its stores and said it could hire 200 people before summer.
The lack of drivers makes the recovery that much harder and people will need to be patient, said Bob Costello, chief economist for the American Trucking Association. “Everybody’s expecting to have their gas stations up and running overnight. That’s not going to happen and part of the reason is a stressed supply chain because of the driver shortage.”
Hundreds of trucks have now descended into North Carolina with fuel from other parts of the country, said Rob Leon, the emergency director for Broco Oil, a Massachusetts-based fuel distributor, who has been driving a truck himself this week, making deliveries in the state.
Terminals are still far from back to normal though as sites across the state attempt to replenish supply.
“I was at the terminal this morning, and I took the last 1,000 gallons of gasoline and the last 1,500 gallons of diesel fuel that they had,” said Leon. “We had a truck yesterday that was in line for over 12 hours, and then they just turned around, didn’t even get a load.”
© 2021 Bloomberg L.P.
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