ATA Presses for a Cap on Diesel Fuel Prices

ATA Presses for a Cap on Diesel Fuel Prices
Sunday, April 6, 2008

On March 27th, the American Trucking Associations (ATA) urged the Bush administration to quickly take measures to ensure that affordable supply of oil is available to the 3.5 million truck drivers and consumers in the U.S. The ATA said as truckers currently face the highest prolonged fuel prices in history, and some motor carriers believe fuel has surpassed labor as their largest expense, the federal government must step in to help bring the price of diesel fuel down.

The ATA recommended the federal government to: stop filling and instead release oil from the Strategic Petroleum Reserve, work with the states’ attorneys general to fight the likelihood of any fuel price overcharge, require all new trucks to install electronic speed limiters set at no more than 68 mph, and set a national maximum speed limit of 65 mph. ATA President and CEO Bill Graves expressed his concern over how increased fuel prices affect the trucking industry as well as the nation’s economy as a whole. Although the trucking industry is doing its best to conserve fuel and limit its consumption, the federal government’s help is still very much needed.

Pressing for immediate action for what is described as a crisis situation, the ATA said it issued letters of late to President Bush, the Department of Energy, U.S. Environmental Protection Agency (EPA), the Federal Motor Carrier Safety Administration, Department of Transportation (DOT), the National Highway Traffic Safety Administration, and the Treasury Department.

The ATA, which represents more than 37,000 member motor carriers, said that the trucking industry is expected to spend a record-high $135 billion on diesel fuel this year, some $22 billion more than last year.

Owner-operators Struggle to Keep Business Afloat

Owner-operators Struggle to Keep Business Afloat
Wednesday, March 19, 2008

Trucking’s owner-operators have been hit with high diesel prices, cut loads, and lower shipping rates. The self-employed drivers are almost going bankrupt and seem to be at the risk of losing their jobs.

The housing decline and less consumer spending have cut into loads, and the extra trucking capacity at hand is causing freight rates to spiral downward. In addition, diesel prices, which are always higher in winter, have experienced an astronomical spike, doubling over the past four years.

According to the Department of Labor, nearly 9% of the nation’s 3.4 million truck drivers are independent owner-operators. John Saldanha, who teaches logistics at Ohio State University, said that trucking will be deeply affected if owner-operators ever lose their jobs; the trucking scene will turn into a group of regional and national oligopolies that, once the economy revives, would send shipping prices higher.

On the other hand, business looks far more promising for the large public trucking companies as they have had their stocks climb since January. Big trucking companies, like J.B. Hunt Transport Services Inc. and YRC Worldwide Inc., tend to buy everything from fuel to tractors in bulk; as such, thousands of gallons of diesel are bought at a time on the commodities market to be stored later on.

In the end, owner-operators are left feeling neglected and on the fringe more than ever. In order to survive in the business, truckers call for caps on diesel prices, or tax credits for them and further constraint for intermediaries who broker truck loads.

Annually, rumors of a nationwide truck strike circulate. In January, some truckers kept their trucks off the road for a week in the hope that a week’s strike might be what they need to not ultimately lose their jobs.

Rising Fuel Costs Suspend General Delivery’s Trucking Service

Rising Fuel Costs Suspend General Delivery’s Trucking Service
March 16, 2008

Trucking business across the country is being hit hard by high diesel fuel prices, and Fairmount-based General Delivery Inc. is no exception. GD president, Chip Thompson, says that with last week’s diesel prices of $3.67 a gallon, the company was paying between $8,000 and $10,000 a day just on fuel for 40 trucks, keeping in mind that a gallon allows trucks to travel 6 miles only.

As a result, the company had to shut off its over the road trucking service, which has been a part of its business since 1950, and the 29th February witnessed the company’s last trucks on the road. Thompson has expressed his sorrow over how the company’s trucking service has come to a halt after 58 years, but the high fuel prices forced the company to come to such a decision.

Although the company is currently working on some restructuring, it is still in the business of repairing trucks and trailers.

Trucking Companies Hit by Elevated Diesel Fuel Prices

Trucking Companies Hit by Elevated Diesel Fuel Prices
March 13, 2008

Local trucking companies are faced with the ordeal of having to adapt to the constantly fast-climbing fuel prices across the nation.

Rich Ferguson, terminal manager of Brilliant-based Fraley & Schilling Inc., conceded that, with elevated diesel fuel prices, the company’s ability to profit has been deeply affected. However, he said that his company has not resorted to cutting down the number of available trucks like other companies in the tri-state area have. Actually, the company is enjoying a very strong run in business in the area and is actively seeking more drivers.

Still, with diesel prices rising, it has become increasingly difficult for his company to recover those costs. Ferguson added that recent economic conditions are to blame for the decreased demand for trucking services in the Midwest. He expressed his concern over how the weak dollar makes imported goods more expensive and consequently how it is getting in the way of importing more goods from other countries.

Ferguson pointed out that Fraley & Schilling Inc. is indeed facing two problems when it comes to demand. The first of which is owing to the fact that the trucking service is not in high demand as it was before, and this subsequently affects the company’s ability to fix the prices of its services. The second is that the demand for trucking service is usually Truckingsubstandard in some areas around this time of year. The demand for transporting building products, for instance, has waned off at this time of year.

Facing a battle of his own is Joe Stenger, chief executive officer of Barnesville-based J.W. Stenger Trucking, who mentioned that the elevated price of diesel fuel has hit his company. A key component of the company’s variable cost of operation, diesel fuel’s increased cost can be passed along as fuel surcharges. However, erratically fluctuating fuel prices are causing this once stable system to spin out of control. He added that with the fuel surcharge often being lower than it should be, the company’s profits have diminished. Still, the company does not make any fewer deliveries as it transports a wide variety of goods.

Besides passing along fuel surcharges, Stenger is actively conserving fuel. New ways of preserving fuel are being examined, and with no-idle systems and satellites having been set up in each of the company’s trucks, drivers will not have to run their trucks while resting overnight and their performance will be closely monitored as well.

Stenger and Ferguson share the same point of view regarding the fact that elevated diesel costs will not cause shortage of goods, and consumers, they believe, should not be concerned about rationing products. There are still many trucks available to transport goods, and the supply will always be there. Stenger also acknowledged the fact that consumers will have to pay considerably higher prices for living necessities and goods delivered by his company, and these higher prices may prove to be a hurdle for them. Consumers will resort to rationing only when they are unable to pay the goods’ higher prices, and rationing will eventually be common for most families once credit card companies do not step in for help.