High diesel prices squeeze truckers

Independent drivers have been hit especially hard, and some will be forced out of business.

By Amanda Paulson | Staff writer of The Christian Science Monitor

from the April 11, 2008 edition

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Gary, Ind. - Bob Campbell no longer idles his truck while he sleeps to keep the heat or air conditioning on: The fuel it burns is too valuable. "You either freeze or you burn up," he says with a shrug.

Still, he's getting by, which is more than Richard Wood, who's eating fried chicken near Mr. Campbell at the Flying J Truck Stop in Gary, Ind., can say.

Mr. Wood lost his truck last month when he could no longer afford the payments due to the spike in diesel prices. Now he's back to driving for a company.

"In six months, everybody operating on a shoestring will be gone," says Campbell, celebrating his birthday with a senior egg breakfast. "If I had a truck payment, I'd be hurting."

While all Americans are facing sticker shock at the pump these days, truckers have been hit particularly hard, watching the cost of diesel skyrocket past gasoline. The national average for diesel is hovering just above $4 a gallon, due to high crude-oil prices and rising demand for diesel, especially in China and Europe. Truckers often pay close to $1,000 to fill up a tank that might have cost $600 to fill a few years ago.

Independent truckers – those, like Campbell, who own their own rigs – are the ones being hit the hardest. They make up roughly a third of truckers. With little pricing power or ability to collect fuel surcharges, many of them are accepting hauls that barely allow them to break even or that even lose money. Conditions are bad enough that a week ago, some truckers tried scattered protest attempts – strikes, slow drives to tie up traffic, or drives to state capitols – which largely fizzled due to the unorganized nature of the industry.

"The reason it's such a big issue isn't that the price is $3.50 or $4, but that it went up so quickly," says Peter Swan, a professor of logistics and operations management at Pennsylvania State University in Harrisburg. As far as independent truckers go, he says, "there will be some that will go under, and some will quit working until things get better.... It's a bad situation. If I were a driver and could do it, I'd sit out for a while."

That's what a few tried to do in an organized way on April 1, when the scattered calls for a strike led to several hundred truckers sitting out in protest or slowing to a crawl on the New Jersey Turnpike. The strike efforts did prompt a few news stories, but the efforts had little effect, and few truckers said they could afford to join in.

It was also unclear just what effect they hoped to have: Some asked for state fuel taxes to be repealed, while others hoped to put pressure on the federal government to tap into national oil reserves to help lower prices.

Still, some independent truckers are moving forward with more efforts. They're planning a rally in Washington at the end of this month that would include themselves and others affected by high fuel prices. If nothing gets
accomplished then, they're suggesting another strike for May 5.

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