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Marcus D'Elia on how rising diesel prices are squeezing trucking costs

Sep 1
2 min read

In a report by CNN Brasil, written by Maria Julia Blanes, on the impact of rising diesel prices on Brazilian logistics, Marcus D'Elia, a partner at Leggio, discussed the weight of fuel in freight costs and the limits of transitioning to alternative energy sources in cargo transport.



Diesel can account for up to 40% of freight costs

According to D'Elia, diesel's share of transport costs varies with distance: around 25% of freight costs on shorter routes, rising to as much as 40% on trips of up to 2,000 kilometers.


"Transport accounts for roughly 50% to 55% of logistics costs. Diesel becomes significant because it makes up between 15% and 25% of the logistics cost of moving a shipment," he said.



Technology to reduce movement, not just consumption

D'Elia noted that data and logistics-planning tools help reduce the actual movement of goods, not just fuel consumption per trip, which lowers transport costs and reduces operations' exposure to diesel price swings.



Electrification depends on distance

In the expert's assessment, the viability of fleet electrification is closely tied to the type of operation. "It starts with distance. A vehicle making deliveries within a city can return to base daily to recharge, which makes electrification a more viable option. But the picture changes when the route crosses state lines," D'Elia explained.



The transition should happen in stages, not overnight

D'Elia pointed out that no single technology today can replace diesel across all applications while keeping costs at the same level, and that an abrupt substitution could create a new economic problem, with knock-on effects on final product prices and the competitiveness of Brazilian companies.


"We have time to choose our solutions and adjust our economy properly, without a heavy impact from an abrupt shift in fuel type," he added.





CNN Money article clipping

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