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.
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