New York City (NYC) buys night deliveries now — up to 14 businesses will share more than half a million dollars to move freight into the 7 p.m. to 6 a.m. window [1][3]. But the diesel those trucks burn at midnight bills the same as it does at noon: above $8 a gallon in California in early October, and a national average $3.711 higher than a year ago [4][6]. The time saving is real — carriers that shift a route into the off-hours cut running costs 35% to 45%, and bank $30,000 to $50,000 a year on each converted route [5].

The big picture:

I’ve been reading New York’s freight plans all week. The two halves of this story sit on different ledgers.

The city buys the cheapest lever it owns: the hour a truck runs [1][3]. Toll money from Manhattan pays companies to move deliveries out of daytime traffic.

The Department of Transportation (DOT) tracks trucks, not dollars. The plan targets 5,000 off-hour spots by 2040, shifting 62,000 trucks out of peak hours [1].

Faster travel and fewer parking fines drive the 35% to 45% savings [5]. But the core cost closing small carriers is counted in gallons.

California averaged $8.09 a gallon on Monday, after September weeks near $8.25 [6]. The national mark hit $6.199 for the week of Oct. 5 [4]. A fuel surcharge covers only 70% to 75% of that spike for the smallest operators [6].

By the numbers

  • $5 million — Off-hour incentive pool: The city gives out toll money through the Metropolitan Transportation Authority (MTA) to businesses that promise a year of night deliveries [1][3].
  • $30,000 to $50,000 — Route savings: Carriers that swap a day route for a night delivery cut running costs 35% to 45% [5].
  • $6.199 — National diesel average: The U.S. average dropped slightly in early October but stays $3.711 above last year’s mark [4].
  • $8.09 — California diesel average: The state price stayed high through early October after September weeks near $8.25 [4][6].

What I’d watch:

What strikes me here is how fleets fight the fuel crisis with tools the clock cannot touch. United Natural Foods locks in future diesel prices and runs route software across close to 50 distribution centers and 2,000 delivery vehicles to hunt fewer miles [7]. Costco offsets higher fuel surcharges through lower contract rates [7].

  • The second phase: Applications are open on a rolling basis, and the first phase spreads more than $500,000 across up to 14 businesses [1]. I want to see if the cash actually changes routes or just buys quiet pallet jacks [1][3].
  • The contract line: Surcharges cover 70% to 75% of the fuel cost for small carriers [6]. I am watching if that gap moves into the next round of rates or stays with the operator.
  • The tax argument: Freight groups asked California for help [6]. The state’s Farm Bureau estimates dropping the state diesel tax would save 73 cents a gallon [6].
  • The modal shift: Walmart and Wing are adding drone deliveries in Denver and Seattle next year [8]. Best Buy put electric yard switchers to work at two California sites [9]. I am curious how much of the last mile’s answer turns out to be fewer trucks rather than later ones.
  • The 2027 price: An energy researcher expects high diesel prices well into 2027 while damaged refineries are rebuilt [6].

The catch

The off-hour saving is not a myth, but the math carries a hard limit. The savings come entirely from time — faster travel, fewer fines, and more stops per shift [5].

The truck still burns what it burns, mile for mile. I could be wrong about how much of the bill a carrier can pass on, but the surcharge covers only 70% to 75% of the fuel cost, and the smallest operators carry whatever is left [6].

Night work also brings upfront costs. The city covers quiet pallet trucks, backup alarms, and security upgrades so drivers can leave goods safely [1][3]. The cash is one-time, but the pledge demands a full year of night deliveries and shared data [3].

The carbon gain is real, but limited to traffic flow. Daytime truck emissions sit 15% to 18% above the night hours simply because trucks idle less [2]. A carbon ledger that counts gallons per mile will miss that shift.

At a glance

  • The Big Shift: New York City pays businesses up to $5 million out of toll revenue to move deliveries into the 7 p.m. to 6 a.m. window [1][3].
  • Why It Matters: The program buys time savings, cutting route running costs by 35% to 45%, but small fleets are still crushed by diesel hitting $6.199 nationally and $8.09 in California [4][5][6].
  • What I’d Watch: How the second phase spends its money, and whether the fuel line moves into the next round of contracts instead of staying with the operator.
  • Off-hour deliveries: Moving a route into the night so a driver covers more stops in one shift on clear streets [2][5].
  • Fuel hedging: Locking in a set price on future diesel to settle costs without changing what the truck burns [7].
  • Mode and depot swaps: Using drones and electric yard switchers to remove diesel from the job entirely [8][9].
  • The Catch: The city payments are one-time, night work brings new security costs, and the truck still burns the same expensive diesel per mile [1][3].

Related reading

Sources

[1] NYC DOT, “NYC DOT to Provide Incentives to Reduce Truck Deliveries During Busiest Hours and Fight Congestion” (Sept. 24, 2026) — https://www.nyc.gov/html/dot/html/pr2026/nyc-dot-to-provide-incentives-to-reduce-truck-deliveries-during-busiest-hours.shtml [2] NYC DOT, Off-Hour Deliveries program — https://ohdnyc.com/home/ [3] NYC DOT, Off-Hour Deliveries Incentive Program — https://ohdnyc.com/incentiveprogram [4] U.S. Energy Information Administration, Gasoline and Diesel Fuel Update (week of Oct. 5, 2026) — https://www.eia.gov/petroleum/gasdiesel/ [5] INFORMS, “The New York City Off-Hours Deliveries Project: A Business and Community-Friendly Sustainability Program” — https://www.informs.org/Impact/O.R.-Analytics-Success-Stories/The-New-York-City-Off-Hours-Deliveries-Project-A-Business-and-Community-Friendly-Sustainability-Program [6] Supply Chain Dive / Trucking Dive, “California diesel prices remain above $8 per gallon as truckers call for relief” (Oct. 15, 2026) — https://www.supplychaindive.com/news/california-diesel-prices-remain-above-8-per-gallon-as-truckers-call-for-re/833092/ [7] Supply Chain Dive, “How UNFI tackles higher fuel prices” (Oct. 15, 2026) — https://www.supplychaindive.com/news/how-unfi-tackles-higher-fuel-prices/832977/ [8] Supply Chain Dive, “Walmart to expand Wing drone delivery to Denver, Seattle” (Oct. 13, 2026) — https://www.supplychaindive.com/news/walmart-to-expand-wing-drone-delivery-to-denver-seattle/832654/ [9] Supply Chain Dive, “Best Buy pilots battery-powered vehicles at California distribution sites” (Oct. 14, 2026) — https://www.supplychaindive.com/news/best-buy-pilots-battery-powered-vehicles-at-california-distribution-sites/832802/ [10] Supply Chain Dive, “NYC offers $5M to move deliveries away from peak hours” (Oct. 13, 2026) — https://www.supplychaindive.com/news/nyc-offers-5m-to-move-deliveries-away-from-peak-hours/832758/