When it comes to RVing, there’s really no substitute for diesel power. Whether it’s a diesel-pusher motorhome or diesel-powered pickup towing a fifth-wheel or travel trailer, the torque capabilities of a diesel engine — along with the attendant upgrades to drivetrains and suspensions that are usually part and parcel to diesel powerplants — make it perfect for moving heavy RVs.
That said, there may be yet another shortage on the horizon that might directly affect diesel availability.
Modern diesels require the injection of DEF — diesel exhaust fluid — into the exhaust stream in order to meet current exhaust emissions standards. Unfortunately, the main component of DEF is urea (along with de-ionized water), a byproduct of industrial ammonia production. And the largest exporter of urea is Russia, currently engaged in a war with Ukraine and, consequently, facing worldwide sanctions.
To make matters worse, urea also is a key ingredient in fertilizer, which has skyrocketed in cost due to the pandemic and shipping slowdowns. In fact, China — the previous No. 4 urea exporter — has at least temporarily stopped exporting the chemical in order to meet agricultural demands in its own country.
According to a report by Mansfield Energy, urea prices were $600/ton in December — three times the normal rate.
“Across the board, major DEF manufacturers are struggling to maintain supplies,” the report stated. “Most of the major manufacturers have changed annual contracts to monthly spot-priced allocations. Many are reducing their DEF output to increase fertilizer production. Others expect regional outages throughout the year due to labor shortages and supply gaps. Price hikes have been commonplace…”
The shortage has already affected South Korea and Australia, two countries that import nearly all of their urea needs. As reported by Korea JoonAng Daily, a 10-liter container of DEF was retailing for about $51 in South Korea in early November — an increase of more than 750% compared to a year earlier. And while U.S. urea imports only hover around 10%, it faces other problems. Last year, Hurricane Ida damaged some of the major Gulf Coast chemical manufacturing plants, creating delivery challenges. Now, according to a report in S&P Global, widespread railroad service problems in the U.S. could sideline 10% of the nation’s commercial trucking fleet because of fuel and additives supply disruptions — specifically, for DEF.
As the report noted, during an April 27 hearing of the Surface Transportation Board, Pilot Travel Centers CEO Shameek Konar said the aforementioned disruptions have led to Union Pacific Railroad ordering Pilot to reduce its DEF deliveries or face a shipment embargo.
“It’s an absolute disaster. Trucking is already so tight, and we’re having freight problems,” Konar said. “It will hurt our supply chains at a time when we cannot afford it. We want to be part of the solution, but the current situation is untenable for us.”
While the agricultural industry has a fallback of sorts — manure — the same can’t be said of diesel-powered vehicles. The only alternative is rising cost. The Argus DEF Weekly, a product of Argus Media, pegged bulk quantities (a typical order of about 1,500 gallons) of DEF at Dallas at 60.5 cents/gallon at the beginning of 2021; by early December, it was $1.59/gallon. A major supplier, SC Lubricants (SCL) announced back-to-back price increases in December and January that, together, put DEF prices “at the highest they have been in history,” noted a report on the company’s website.
“Based on what we have been seeing and experiencing over the past year, this was to be expected but it’s still a blow for our customers, for sure,” said SCL Vice President of Customer Solutions Dan Dziwanowski. “Unfortunately, everyone is anticipating this trend to continue since there are no signs that costs for urea, transportation, packaging, and others will stop their upward trend.”
According to SCL, a market update released by Blue DEF noted that every step in the process to bring DEF to market has become more costly, from those incurred by domestic urea producers to transportation costs to packaging for totes, drums, jugs and bulk. To make matters worse, the industry is dealing with worker shortages and imported prill (a granular form of urea) that has created a shortage of raw materials.
Will RVers with diesel-powered rigs face a DEF shortage during their travels? At the moment, no. But it will cost more. As noted by Jobber’s World, “The message here is, DEF supply is expected to remain tight with continued unpredictable price movement as the European conflict continues and the planting season nears.”
