Posted on 08/18/2005 10:12:13 AM PDT by SmithL
The soaring cost of diesel fuel is eating into truckers' profits and forcing them to take more conservation measures when it comes to driving their big rigs.
And while trucking companies are able to add a surcharge onto the price they charge per mile for hauling freight, they say it does not completely cover the skyrocketing cost of diesel.
Independent trucker James Bristol of Jefferson City said the high cost of fuel was part of the reason his wife, Joni, returned to work at Lakeshore Mental Health Facility in Knoxville.
"I'm staying home less and driving more," said Bristol, who hauls hazardous materials. "I'm shopping around for cheap fuel. You can't hardly stand it."
Bristol stopped Tuesdayto refuel at Petro Travel Plaza on Watt Road, where diesel was going for $2.43 a gallon.
"My income is getting smaller," Bristol said.
The current nationwide average for diesel fuel is $2.567 per gallon, up 16 cents from a week ago and 74 cents higher than a year ago, according to the Department of Energy.
Independents lose profits Hector Melo, an independent driver for Transport Trailer of Coral Springs, Fla., said the higher costs are eating away at his profits, too.
"They're kicking us out of the business," Melo said. "We can't afford it any more."
He said 20 percent of his income goes to Transport Trailer, and the rest of his expenses "comes out of my pocket."
"I try to keep my speed at 65 mph or lower and look for light loads and look for cheaper places to repair my truck," Melo said. "The more I can shut my truck off, I do."
Manuel Berrios, an independent trucker for Bridge Terminal Transport of Charlotte, N.C., said he is having trouble scraping by.
"It's the first time we've suffered this much," Berrios said. "We pay higher prices at the truck stops. We try not to idle. We reduce the speed. But that takes a lot of time. You lose a lot of time."
Arliegh Myers, an independent trucker for American Eagle of Dallas, is feeling the pain, too, saying, "we're working a little harder."
"You don't take much time off. It's pretty tough. You've got to conserve to keep the costs down,'' Myers said.
That means "less idling and more running," he added.
Jim Miller, who drives for Gainey Transportation of Grand Rapids, Mich., isn't feeling the crunch as much as the independents, but his company is still getting pinched.
While he doesn't have to absorb the higher costs, Miller said his company asks him to fill up where diesel fuel is cheaper and to get less fuel at the more expensive truck stops.
"That means I'm having to stop and fuel up more times," he said. "They'd like us to idle less, but in the South where it's hotter, that's hard to do."
He does, however, try to use Knoxville-based IdleAire, which for a fee heats and cools a tractor-trailer without the truck idling.
IdleAire has a network of stations at truck stops across the country where truckers can rest their engines while still getting air and electricity.
Passing on the costs Bill Jeffers, an independent trucker based in Knoxville, said many haulers have been helped by the surcharge that trucking companies are assessing per mile to their customers.
"Without the surcharge, I couldn't make it," Jeffers said. "You can't run for those kind of rates and make fuel payments and insurance payments. The fuel has hit me in my personal pocket." He said he was bringing home $1,600 a week and that is down to $900 to $1,000, which must cover all expenses.
Bob Pemberton, president of Pemberton Truck Lines Inc. of Knoxville, which has 130 trucks hauling general commodities in the Southeast and Southwest, said it's tough dealing with the higher prices.
"It's a shock to the system," Pemberton said. "You don't really have a chance to digest a rapid increase like that. When it runs up really fast, it's a shock and you have to hurry to handle those costs and spread them out to customers, and the consumer pays in increased consumer prices."
He said almost all his customer contracts include the ability to pass along a surcharge per mile.
Without the surcharge, "We have to eat" the costs, he said.
"As the price of diesel has run up quite a bit in the past month, it's put a hardship on us. We try to go back to customers to recoup additional monies. We also try to put in some things to conserve fuel. We have talked to the drivers about reducing the idle time. We also adjusted the speeds on the trucks. We encourage the guys to check and make sure the (tire) inflation is proper. We ask them to, whenever possible, operate the truck as efficiently as they can," Pemberton added.
Tony Colombo, chief operating officer of Purdy Brothers Trucking Co. in Loudon, which operates 200 trucks in the South and Midwest, said he, too, offsets the price of fuel with a price-per-mile surcharge. His company hauls refrigerated food products.
"We pass on a portion (of the higher fuel costs)," Colombo said. "We recoup about 85 percent of the fuel prices."
Columbo noted, however, that trucking firms can't charge a surcharge for empty runs, which are common when trucks are returning from delivering loads.
Colombo agrees with Pemberton that ultimately the consumer pays.
"We do business with manufacturers and retail outlets," he said. "We charge them for fuel that's going to be passed on to customers."
Without the surcharge, Colombo said his company would be hurting.
"Obviously, it's (diesel prices) not allowing us to make the kind of profit margin we'd like to," he said. "We are making money because we're able to increase the baseline rates per mile."
John Tweed, president and chief operating officer of Landair in Greeneville, which hauls retail freight and other consumer products, said his company looks at the weekly cost of diesel and applies a penny per mile for every nickel increase.
"If we can't pass it along, we can't haul freight," Tweed said.
Rose Ann Froberg, spokeswoman for Watkins Motor Lines of Lakeland, Fla., which has a terminal in Knoxville, said her company also passes along costs to customers, but "our ability to pass those increases on in the form of a surcharge is coming under increasing pressure from our customers, especially those who operate on slim profit margins."
Should diesel fuel prices continue to escalate, Froberg said higher consumer prices will result. Watkins operates 3,200 company and contractor-owned trucks.
"Unfortunately, we, like our customers, have zero leverage when it comes to affecting the price of fuel," she said. "The only thing we can do is wring out as much efficiency as we can from other areas of our business so that transportation costs rise as little as possible."
/Sovereign-'Local'-Liberty,.....ON.......'pc-tolerance' with a bribe...
I think the story is wrong. Truckers ROAR up and down I-95 at 70mph plus. I'm sure that doesn't help their fuel economy.
My husband works for a trucking company. he was told by the boss there that the latest energy bill increased taxes on fuel. Can anyone tell me how I can find out if this is true or not? My husband is furious at Bush for this, but I can't find any fact to back up the statement made by his boss.
For a true tax cut, the govt should drop the federal tax on fuel.
Your husband should be mad at the fact that we only have 149 refineries in the USA and that the last one was built in 1976! You husband should ALSO be mad for the nine different blends of gas required in the USA for different regions. That makes refineries spend MORE TIME making gas and LESS time making Diesel. Thus, less time to produce diesel means that the supply is tight, hence prices go up.
He can direct his anger at the liberal-run environmental groups who lobby the Gov't and restrict any new buidling of refineries and power plants as well.
"Soaring fuel costs squeezing truckers"
"Move along, nothing to see here"
Trust me, he is upset at all that as well. BUT all of that comes from liberal EPA freaks,etc. He was upset at the thought that a CONSERVATIVE president that he voted for had APPARENTLY raised taxes. I have yet to find proof of this however.
Times are so tough he's even starting to obey the law!
>>>For a true tax cut, the govt should drop the federal tax on fuel.
But then how will they pay for all of the pork in the recently passed highway bill? 8^)
Just goes to show how much our elected officials really care about their constituents.
My husband said the same thing. He got the info from some other truck driver. We searched the web and came up empty. I do know this last settlement sheet said he paid two thousand for fuel. Everyone should be concerned because it does reach the consumer. Higher fuel.....higher shipping.....higher retail costs....no matter what we get the shaft. Even with the fuel rebate, he was paying between 1300 to 1600 a week. And, yes, it's eating into our measly profit. If it gets any worse, he'll end up turning the truck back in. I wish we could tell Saudi and Venezuela to shove it up their asses. God, I hate being dependent on some third world for fuel. We should be using Alaska, and telling the tree huggers to shove it up theirs too.
Wow, they are idling less, shutting off their trucks, actually driving the speed limit. Next they'll be looking for more efficiently packed loads. Oh I just hate to see such "suffering".
Obviously, this isn't a thread about SUVs and their drivers. Otherwise, I'm sure you would have mentioned how the gas "crunch" seems to have done little or nothing to dissuade them from their seemingly habitual jack-rabbit starts and hard stops (all in keeping with their devotion to safety, of course :).
Who do you think benefits from all that pork? Constituents be damned. The bottom line is re-election. You and I can b*tch until we're blue in the face. But, as long as they keep getting elected, it's no wonder they keep voting to bring home the bacon. As always, it's real simple: Follow the money.
Let me know if you find anything. I am really curious to know if this is true. Your right. I have noticed everything going up. Have you noticed the price increases in soda products such as Coke? I am surmising that is directly due to the higher fuel costs.
Ditto-WE NEED OUR OWN OIL SUPPLY!!! Can't believe people don't realize how harmful this is going to be on our economy. Everyone seems to have there head in the sand!!!!!!!!!
Once all those high fuel prices for shipping start making you "suffer" you may sing a different tune. THese high gas prices are really hurting the trucking industry and the prices will be passed on to the consumer.
I don't know if you've noticed, but the speed limit in many states is 70mph, and that includes big rigs. Except here in Ca. it's 55mph, which in and of itself creates a hazard around those millions of four-wheelers who are above the law and are doing 75+mph. You need to walk a mile in a truckers shoes, then you might sing a different song.
Also, a thought to ponder. My husband used to drive for a fuel company out of sacramento. He said diesel doesn't go through all the processing that unleaded fuel does. So why is diesel more than unleaded in so many places? People don't realize that 90+ percent of all freight is trucked from point a to point b. And if fuel goes up much more there's gonna be alot of trucking companies going under. That should be great for the economy. I support our President, but quite frankly, sometimes I don't get where he's coming from. I can't think that he would sign something that would be so detrimental to our economy. And I hope it's not true. I'll have to continue my search.
The soaring gas prices will have to be passed on to the consumer so the price of everything will go up and I do mean everything.
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