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Diesel costs squeezing truckers
Bulloch haulers cutting trucks, drivers
Truck biz 1 Web
Brian Smith, owner of North Bulloch Transport in Statesboro, said the price of diesel fuel is pushing many independent truckers out of business. - photo by JAN MOORE/staff

                Gasoline and crude oil jumped to new records last week, with gas rising three cents to an average national price of nearly $3.65 a gallon and oil crossing $124 a barrel for the first time. Diesel prices also rose, adding 0.9 cent to match a record national average of $4.251 a gallon.

            "Rising fuel costs are having a huge impact on the trucking industry" said Tiffany Wlazlowski, deputy press secretary of the American Trucking Associations. "For many motor carriers, fuel is now equal to labor as the highest expense; and for some carriers, fuel has likely surpassed labor as their largest expense."

            The American Trucking Associations is a large non profit organization representing the interests trucking companies and truckers on a national, state, and community level.

            "Just a one-penny increase in the price of diesel annualized over an entire year costs the trucking industry an additional $391 million a year," she said. "The trucking industry spent more than $112 billion on fuel in 2007, and we’re on pace to spend $141.5 billion in 2008 – a record high."

            Truckers are being squeezed as the price of fuel skyrockets and the price per mile being paid to truckers to haul freight is not increasing at the pace necessary to offset rising fuel costs.

            "When I got into this business years ago, trucking was a good business to be in," said Brian Smith, owner of North Bulloch Transport. "You could make a very good living. Now people are just hanging on hoping for better times. A lot of truckers are driving just to earn enough to pay their truck note each month."

            Smith owns four tractor-trailer trucks that he keeps on the road hauling heavy equipment.

            "About four years ago, we moved towards transporting farm equipment, road work equipment, things of that nature," he said. "That specialization has been good as we are paid more per mile because of that. However, we aren't making what we used to."

            Smith's office manager Stasia Smith said independent truckers have been coming into the company's office on Martin Luther King, Jr. Boulevard on a steady basis asking if they know of anyone who would like to buy their truck.

            "It is really sad," Smith said. "There just isn't enough left over after paying for fuel to keep the truck running with repairs and the like. A lot of guys are just parking their trucks and looking for something else to do."

            Marty Rushing, owner of M&K Trucking in Statesboro, said the price paid for transporting freight is the last thing to increase.

            'The cost of everything else is going up, but not what we are getting paid," Rushing said. "We were running 14 trucks, we are now running six. I had to let guys go."

            Rushing said like other trucking companies, he has to pay his fuel bill every seven days, but doesn't get paid for hauling the freight for 30 to 60 days.

            "We have to come out of pocket for increased fuel costs before we ever get paid," he said. "It costs over $1200 to fill up one truck which is double what it was last year. It doesn't take very long to run up a huge fuel bill."

            Rushing said independent truckers can get paid $2 per mile plus some fuel surcharge money, but the trucks don't get but four miles to the gallon.

            "With the cost of gasoline, once you pay a driver there just isn't anything left," he said.

            Wlazlowski said to put the price increase in the cost of diesel fuel into context, you must look at where costs were just a few years ago.

            "At the current price, compared with five years earlier, it costs 180 percent, or $800, more to fuel up a typical tractor-trailer," she said. "Compared with 10 years earlier, it costs 287 percent, or $923 more to fuel up a typical tractor-trailer."

            Wlazlowski said in 2007, the U.S. trucking industry’s diesel expenditures were about equal to the entire New Zealand economy.  Additionally, at $112.6 billion, the industry’s diesel bill was 9 percent larger than the entire Kuwaiti economy, the 6th largest oil exporter in the world.

            Brian Smith said market conditions are driving some truckers out which ultimately could result in charges for hauling freight going up.

            "There have been those people out there that would drive for nothing," he said. "We call them rate cutters, because they would take such a low per mile rate that it depressed the whole market. Now those guys are parking their trucks, so maybe freight rates can begin to go up, because there aren't those guys out there willing to drive for nothing anymore."