As gas prices soar, truckers battle record costs
A rattled industry keeps on rolling, but between diesel prices and rising demand, it's a bumpy ride.
Just last week, Dave West stopped to fill up one of the tanks on his 18-wheeler. The bill: $258.
It wasn't so long ago that $258 would have covered the cost of both tanks. Not anymore. With oil prices closing above $50 a barrel on Friday for the first time in 21 years, and the national average for the price of diesel hitting $2 a gallon for the first time ever, shock waves are rippling through the transportation industry - the main consumer of diesel fuel.
That price per gallon is more than 40 percent higher than at this time last year, according to the US Department of Energy, affecting everything from trucks to ships to railroads. As Hurricane Ivan's damage to oil production in the Gulf of Mexico combines with increasing global demand, concern is rising about oil prices dragging down the national economy.
When fuel prices rise, most Americans can cut back on weekend trips, take public transportation, or use the family sedan instead of the SUV. But there are no such alternatives in the business of moving things from one place to the next. Fuel is a hard cost, the greatest expense after labor.
"Transportation is getting to be a very expensive commodity," says Tom Wade, a board member of the Transportation Association in Laredo, Texas, the busiest inland port in North America. "And it's going to be expensive for the consumer as well, with all those costs passed on."
But independent truck drivers, who can't pass along higher fuel prices, are feeling them the most. Any price hike, no matter how small, can significantly affect their bottom line.
"For independent owner-operators, it means more money coming out of our pocket and less money to put back into the truck. And if you don't keep your truck up, you go out of business," says Mr. West, adjusting his cowboy hat before hitting the road.
At America's truck stops, stories are swapped over plates of chicken-fried steak and pie à la mode: Independent owner-operators have been returning their keys to dealerships and walking away from their trucks, hauling for companies for the first time in their careers, or quitting the business altogether.
The loss of experienced drivers is of particular concern in the industry, which is struggling to attract new truckers. Word is out that fuel costs comprise as much as 25 to 35 percent of an independent's expenses.
These high prices are coming at a particularly bad time for the industry, says Bob Costello, chief economist at the American Trucking Associations in Alexandria, Va. "This is a busy time of year for trucking. We are coming into our peak demand season, with more trucks on the road than at any time of the year," he says.
In addition to extra demand during the holiday season, demand is up in general: a 7.2 percent rise over last year.
But some truckers worry that passing the cost of fuel on to the consumer will slow the economy and therefore slow demand for their services. "The whole situation is very unsettling," says Mr. Costello.
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