Diesel Fuel Prices: What We
Are Saying to the Media
(March 28, 2008) -- The sky-rocketing price of diesel
fuel has reporters across the country contacting OTA asking about how the
trucking industry is coping with the high prices. Here’s what OTA
President David Bradley is telling the media:
The rising cost of diesel fuel is having a significant
impact on trucking companies and individual owner-operators (typically
one-man/one-truck contractors). Traditionally, fuel represents anywhere from 15%
to 30% of a carrier’s operating costs, which is the second largest component of
cost after labour. (For owner-operators it is their number one cost).
However, the cost of fuel has been gaining on labour
as the top cost and is now in the range of 40% to 50% of cost for most trucking
companies. The price of diesel fuel is now higher than that of unleaded gasoline
-- something that had never been seen until a couple of years ago and even now
is still a rarity. The industry tries to cope with these increased costs by
continually trying to improve its fuel efficiency through speed control,
auxiliary heating and cooling systems, reducing idling, etc.
However, like any business truckers try and pass the
increased costs along to their customers by way of fuel surcharges. To the
extent that they are successful, these increased costs ultimately flow through
to the consumer by fuel surcharges.
Remember the old saying: If you got it a truck brought
it. Moderating this impact right now is that many trucking companies are
falling behind in recovering this cost as the customers (the
shippers) try to take advantage of an over-capacity situation in trucking
brought about by a weak economy by balking at paying the
full fuel surcharges. No doubt this is putting many companies,
especially those that do not have the resources to weather this storm, at
risk.
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