The United States is currently experiencing shortages in products like baby formula, sunflower oil, and eggs. The Transportation Industry could be hit with a catastrophic DEF shortage if Union Pacific upholds an ultimatum with Flying J. The dispute combined with the rising prices of diesel and the shortage of urea will end up parking trucks. Analysts are predicting June 2022 – September 2022 for the shortage.
Why is DEF so important? DEF is the acronym for Diesel Exhaust Fluid (DEF). The reason behind DEF is to reduce diesel fuel emissions. If your truck was made after 2010, it is required to mix DEF with diesel fuel exhaust to reduce diesel emissions. DEF is stored in a separate tank and the truck won’t start if the tank is empty or not working properly.
What is fueling the DEF shortage? There are two main contributors to the shortage.
- DEF is made with urea. Natural gas is the key raw material in urea production. The United States imports most of the urea it uses due to the government not supporting natural gas production. We depend on countries like Russia, Qatar, and China to import our urea from. Russia is the main supplier of urea and is presently at war with Ukraine. This has already caused an increase in the price of DEF.
- The Union Pacific Railroad and Pilot/Flying J currently have an ongoing dispute. Flying J is one of the leading suppliers of fuel and is the largest operator of travel centers in North America. Pilot/Flying J sells 30 percent of ALL the DEF consumed in the United States. Of all the DEF that Pilot/Flying J sells, 70% of it comes from the Union Pacific Railroad. In April, Union Pacific told Flying J to reduce their shipments by 50%, or else they would be embargoed, which would ultimately bankrupt Pilot/Flying J. If Union Pacific makes good on their threat, this will cause shortages as it would cut the national supply by 15%.
The bottom line? Freight will be at a standstill without DEF.
What can you do? Keep your eyes open and be aware. You may start to notice that truck stop product displays of DEF are empty. If you want to get ahead of the possible shortage, you can purchase DEF ahead of time and have your own supply ready. While it is most commonly purchased at the pump, you can purchase it in containers to have on hand.
While we don’t want to see a recreation of the toilet paper shortage of 2020 due to panic buying, we do want to see our CarrierNet clients remain moving and not parked along the side of the road if this happens.