Posted on 03/29/2008 4:22:04 AM PDT by Man50D
Crude oil is running $100 a barrel and it costs $50 instead of $35 to fill your car, but you carpool occasionally and watch the number of trips across town so you're doing all right so far. But what happens when, in addition to the $50 fillup, your groceries go from $80 to $120 and you hunt for new jeans but the shelves don't even have your size?
That's the very real possibility that is triggering an unofficial nationwide call for a shutdown by thousands of independent truck operators who deliver those supplies – all sparked by the rising costs of fuel.
One website already explains about 18,000 trucks have been committed to the shutdown starting April 1, and whether it goes for a day or a week, they are hoping that their actions will get the attention of officials who, they demand, must do something to help.
The Washington Post reports Lee Klass, hauling 41,000 pounds of hairspray from Florida to Quebec, stopped in North Carolina to refill fuel tanks, and paid $960. Diesel prices, he told the paper, "are terrible, and they're not getting any better."
Auto clubs that monitor prices say diesel has gone up more than 50 cents a gallon in barely two months, and has been setting records almost daily. The nationwide average on one recent day was $3.87 a gallon.
The newspaper warned fuel price hikes, especially trucks, have the potential to disrupt the Federal Reserve's plan to contain inflation while creating growth with low interest rates, combined with the money giveaway program approved by Congress.
That's because trucking claims 70 percent of U.S. freight transportation, from the cars you drive to work to the milk your children drink.
(Excerpt) Read more at worldnetdaily.com ...
If the trucks stop rolling, the country stops. Time to consider rationing with truckers getting priority.
It certainly was stupid for Bill Clinton not to have opened ANWAR for drilling. That oil would now be on the market. Why doesn’t someone ask his lovely wife to defend the resulting oil shortage?
Diesel is over $4.25/gal in my neck of the woods.
I know indy drivers who get paid by the mile, in some cases are losing money when they work.
Cheaper to park the truck.
LLS
Time to consider rationing with truckers getting priority.
Are you talking about rationing diesel?..... If so then what are you going to do about the farmers, construction equipment, etc.? Price will do the job of rationing better than any gov’t attempt. After all there is only a limited amount of diesel that can be refined from a 42 gallon barrel of crude.
I’ve been expecting this. No big surprise here. I am amazed they haven’t done this earlier. The price of diesel is crazy. It’s basically, from what I hear, gone up to help keep gas prices down. Diesel is left over fuel, the price is a rip off. We need to develop every oil field available here in the States. Say goodbye to the Arabs.
“Funny thing... when this has taken place in the past, prices fall quickly.”
Are you suggesting that oil prices are not controlled by the free market?! That will draw the ire of many freepers!! I’ve been told again and again, oil prices are set by the market, no one can control them. It’s just how it is.
By the way, I agree with you.
‘bout time.
The day they start rationing hairspray, somebody’s going to be sorry.
Shoot, just ship by train, like we should do anywise. Get 90% of the trucks (and the demand for diesel) off the road, make the roads safer, and will extend the life of our highways by cutting down on wear and tear.
I'm going out on a limb here, but are these the same people who think the evil Bush sets the price on fuel?
Their efforts would go a lot further if they brought attention to their cause and publicly stated their goals, who they are targeting and what reaction exactly that they are expecting... and do it in a responsible manner. I think this is nothing more than a hissy fit by a bunch who thinks there is some sort of inside big oil conspiracy.
Here comes the Mexican takeover of US trucking.
What’s a gallon of diesel cost in Mexico anyway?
Hairspray?
Smiling at you.
Oh dear.
Well, actions like this are a market force anyway, if you want to go there.
This is just the ‘demand’ side of the market talking.
Exactly. This "trucker strike" is a temper tantrum being thrown by conspiracy-theory believing idiots.
Personally, I say manufacturers ought to start farming out their transportation contracts to railway companies, and start a long-term trend toward revitalising that industry. You can haul literally hundreds of truckloads of goods with one train, for a fraction of the diesel consumption. I can only see benefits from getting all those trucks off of our highways. Accumulated wear-and-tear on the road system would be reduced. Traffic flow would be improved. What's the problem here?
Trucks which operate locally only. No need for long-haul interstate trucking.
The truckers should park their rigs and protest in front of the Sierra Club’s headquarters as well as other so-called environmental groups. The greenie-weenies, and the liberal politicians, are the reason there’s no drilling in ANWAR, nor off the coast of Florida, no refineries being built in 30 years, no new nuclear power plants, etc. etc.
Might be a good time for the railroad companies to consider re-investing some capital into expanding their carriage capacity?
Right now we have trucks going cross-country taking up the roads, using 2 drivers and burning all that diesel for one container.
For popular long-haul routes, trains can move MILES of containers, use only a few people to haul them and use several times less diesel than trucks.
Pure supply and demand. There are many reasons why gas and diesel prices are rising, not the least of which is huge increases in China and India. Find a 10 year old picture of Beijing and all you see are bicycles. Today, it looks like LA at 5PM. Rising standards of living in other areas of the world are having a huge impact on pump prices.
I guess what I don't understand is how a strike here will impact prices in the long run. It might cause a short run dip, but in the long run the higher prices encourage more exploration and augers development of alternative energies. All the strike will do is disrupt market chains, cause a short-lived dip in diesel prices, and a permanent loss of a couple weeks wages for truckers.
Plus, who is the strike supposed to prompt to solve the problem? Washington? They've been collecting the "alternative fuel tax" since 1973 and I haven't seen anything come from that yet. Indeed, about the worst thing you can ever ask Washington to do is put on their Ego Hats and pretend they can outperform the free market. Such hubris!
In 2000 I was an alternate delegate to the Republican Convention. We were seated near the Alaska delgation and they were wearing vests stating: "OPEN ANWR". If that had been done, we would be using Alaskan crude by now.
Someone is fiddling while Rome burns.
Thanks, Democrats!!!
There are too many trucks bidding for jobs,keeping freight rates low while fuel prices rise.
Shippers only pay what they need to for the job. Some truckers need to quit or go bankrupt or strike for higher prices to match the fuel. It will happen one way or another. Let the market rule.
How so? The actions of "speculators" is largely based upon their perception of where supply and demand is going to go, based upon present forecasts. It's "gambling", in a sense, but to say that supply and demand don't play a part in it is simply nonsense.
Why are oil prices going up? Because oil consumption is going up, worldwide. Petroleum is a global market. Those people who think that by not filling up at Citgo that "we is gonna punish that Chavez guy by not buying Venezerwoolian oil" are kidding themselves. 'Zuelan oil goes into the market, and is purchased by refiners, just like Nigerian and Saudi and Mexican oil. Prices are going up because of huge increases in demand (China, India) coupled with a much lower increase in production (due in part, but not totally, to the idiotic greenies who hamper the expansion of America's truly massive petroleum reserves in Alaska, North Dakota, and offshore). Despite the conspiracy theories, supply and demand area live and well on planet Petroleum Prices.
Assuming for argument's sake your scenario was implemented, such a sudden jump of rail traffic would cause a traffic jam on the rails. Any reduction in wear and tear on the nation's roads would be met with a corresponding increase in wear and tear on the nation's railway system.
Oh, there's no doubt that there would be a need for re-investment in this sector before it could fully handle our transportation needs. Switching from trucks to rail would be a VERY good idea, but one which will, admittedly, take a while to implement. But then again, so would satisfying all the frenzied demands by FReepers on here to expand petroleum production in Alaska, etc. to lower prices. Rigs, extra pipeline capacity, and (especially) extra refining capacity are hard to get approval for, and long and expensive in building, too.
Long-term, though, reducing our need for trucks and expanding our use of rail would be simply smart business.
> Trucks which operate locally only. No need for long-haul interstate trucking.
If this couldn’t work in New Zealand, it sure won’t work in the US.
True, but my argument is mainly that this would be an excellent opportunity for any forward-looking rail company to take the initiative and regain some market share, hopefully leading to the expansion of that industry and the reduction of the number of (and need for) long-haul trucks.
It used to work here, before the rail industry unionised itself into oblivion (I know, gross simplification, but I don't have a lot of time here). Why couldn't it work again?
Well, switching from road to rail transport would require a significant re-investment in terms of capital and equipment for the rail industry. This would necessarily be a slow process. But, my point is, so would satisfying all the demands that we open up ANWR, etc. and increase the supply of oil. You don't set rigs, drill wells, lay pipeline, get Congressional approval (in a just world, this wouldn't even be needed), and build more refineries at the drop of a hat.
And right there is the entire point. There is no "temper tantrum" taking place here, it is simply one of the first signs of an economy that is breaking it's mold. The cost of fuel has exceeded the amount of profit for most aspects of shipping and that increase will come out of consumers pockets. Prices on everything will go up. No need to think about who will get that money, it will be a percentage/profit to various aspects of the petroleum industry and to the country that is actually pumping it out of the ground.
The delivery systems of the US are being severely disrupted by this and it is no different than roads and bridges being disabled and traffic must travel further to go around the problem. More fuel = higher cost. Or perhaps folks think store shelves "miracle" themselves into being stocked?
Any such disruption, be it from fuel prices, bombed out bridges, blocked roads, whatever, is going to disrupt the monetary system of any nation. If we had a lick of sense we would concentrate the cost increase onto the source of the problem and reimburse the folks most impacted by this first, then others through rebates.
Why doesn’t someone ask his lovely wife to defend the resulting oil shortage?
Her reply would be because it’s Bush’s fault. He is president now not Bill.
Can’t you hear the howl of the democrats if Bush opened ANWAR to drilling. So his (Bush’s) buddies can make billions?
I was unaware of a shortage problem.
Can you elaborate?
They’re doing it. 1 mile of new track costs about $1 million.
And just how do you propose that those goods get from the train to your local store?
Horse drawn wagons.
I agree with you. Regional areas for delivering goods would make a lot more sense in a lot of ways. When you think of the number of trucks required to haul as much as several train cars, it’s a waste of raw materials in more ways than one.
There’s a rather large train yard near us and you can see the semi trailers already loaded being shipped on flat bed train cars. Convenient. Put them on the trains, ship them across country, and just pick them up and delivery them locally.
It’d be nice to have the roads back to mostly cars again.
“If the trucks stop rolling, the country stops. Time to consider rationing with truckers getting priority.”
But rationing is a tool which is used when an essential commodity is in high demand and extremely short supply. As an example, gasoline during World War II.
There is no “shortage” of diesel fuel on the market. Here, you can buy as much as you need; the only problem is that it will cost you about $4.45 per gallon. When your truck holds 200 gallons, that can get expensive, particularly when you are locked into haulage contracts that don’t provide enough leeway for the owner/operator to raise his own prices in order to cover operating expenses.
In the free market, the only natural solutions are to either:
1. increase the supply to the point where the price is forced down due to “not enough demand for existing supply”, or,
2. reduce the demand, which will in turn force prices downward to move supples.
Even doing the latter is questionable, because once demand is “restored” to it’s natural level, prices will go right back up.
I can see one draconian alternative to “rationing”: that is, to allow truckers to buy as much fuel as they need, but to ration diesel purchases for AUTOMOBILES ONLY. As I said, so many would object that it would be unworkable, and even if such a plan were implemented, why wouldn’t the diesel producers (oil companies and refineries) then lower production levels to “meet reduced demand”, once again resulting in high prices?
Just some thoughts,
- John
Hmmmmmmmmm......and how do we get it from trainyard to the store? Horse and pony? Our train system is so clogged up, I don't know how they could add much more than they do. If you need something tomorrow---a truck can get it there, a train might take two weeks. Trains aren't fast food service like trucks. I don't think I want to drink my milk off a slow train to China.
service is awful and rates are five or six times what they were less than a decade ago, plus fuel surcharges.
How do thee rate compare with trucking rates? Just asking, because I don’t know.
LLS
Absolutely right on!
LLS
LLS
At short distances, trucks make sense. 300-400 miles ore more usually means using rail, if you have cars. Cars rent for $700/month.
You are right on with a great solution to our oil crisis. Our descendants will wonder why it took us so long to get our rail systems modernized. We will have to be weaned off our automobiles first, and that process will take a generation or two.
What do they suggest these officials do?
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