Experts say every time the price of fuel rises 5 cents a gallon, a trucker’s annual costs increase by $1,000. Between July 2007 and January 2008 it went up 40 cents a gallon.

RUMFORD – To keep America moving, truckers annually haul more than 10 billion tons of freight, according to the American Trucking Association.

That consumes about 53 billion gallons of fuel each year, including 38 billion gallons of diesel.

Last month, the ATA projected a record-high diesel fuel bill for 2008. The trucking industry, it said, would spend $135 billion on fuel based on current fuel price forecasts.

That’s a $22 billion increase over the $112.6 billion spent by trucking in 2007.

Small business truckers – those operating six or fewer rigs – comprise nearly 90 percent of the trucking industry, according to Jim Johnston, president of the Owner-Operator Independent Drivers Association in Grain Valley, Mo.

“Considering that trucks account for the movement of 69 percent of all goods transported in the U.S. and are the only providers of goods to 75 percent of American communities, small business truckers are quite literally the backbone of our nation’s economy,” Johnston wrote in a Jan. 30 letter to President George W. Bush.

He was seeking immediate relief from the escalating price of diesel fuel on behalf of OOIDA’s 162,000 members nationwide, of which 776 are in Maine.

“The cost of fuel is the single greatest operating expense with which small business truckers must contend. Volatile and often high fuel prices have devastated these businesses over the last several years. Thousands of trucking companies have not been able to survive,” Johnston said.

Long-distance truckers Herman and Kimberly Brown Jr.’s business, Brown and Associates of Hartford, Maine, is one such trucking company.

Rising diesel fuel prices last May forced them to drop their health insurance coverage, which cost $800 a month.

Then, on Jan. 21, three days after they returned home from a hauling job, Herman suffered a stroke that left him unable to work and pay bills.

Both he and his wife blame the stroke on stress over fuel prices, which, in 2007, accounted for $50,000 to $75,000 of the $194,400 they paid out in fuel, bills and trucking-related expenses like fees, tolls, taxes, permits and surcharges.

To pay bills, they’re now forced to sell their rig.

Johnston said that every time the price of fuel rises by 5 cents a gallon, a trucker’s annual costs increase by roughly $1,000.

In six months prior to Jan. 30, the average price of diesel climbed by more than 40 cents per gallon.

“This is an enormous burden on the small business trucker whose average annual income is $37,000 to $40,000. The urgency for action to help truckers survive grows with every additional cent they must pay at the fuel pump,” Johnston said.

OOIDA spokeswoman Norita Taylor said last Thursday by phone that U.S. Sens. Olympia Snowe, R-Maine, and Sherrod Brown, D-Ohio, introduced legislation earlier Thursday, which, if approved, is expected to help small-business trucking professionals nationwide.

The “Truthful Reliable Understanding of Consumer Costs Act” will require that 100 percent of fuel surcharges levied on shipping customers be passed through to whoever actually pays for the fuel to haul the shipper’s goods.

In most cases, that’s truckers.

“This bill will go a long way toward helping truckers survive the brutal cost of fuel,” Todd Spencer, executive vice president of OOIDA, stated in a Thursday report.

“And, it will provide needed assurance to shippers and, ultimately, consumers, that higher shipping costs are actually because of higher fuel prices and not gouging by greedy middlemen. Sens. Snowe and Brown should be commended for their leadership on this matter,” Spencer added.

Taylor said fuel surcharges have long been the primary mechanism for trucking companies to respond to increased fuel costs.

“With diesel prices consistently rising, shippers are paying more now in fuel surcharges to get their freight moved than they ever have before,” Taylor said.

“It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges – or none at all – to the truckers who are actually transporting the goods and paying the fuel bill,” Spencer said.

Johnston also asked Bush to immediately stop the diversion of oil supplies to the Strategic Petroleum Reserve and, instead, allow the product to directly enter the marketplace.

Shipping oil to the reserve at this time only serves to exacerbate the already tight domestic fuel market.

“If diesel is the lifeblood of ground transportation, then truckers are the heart. And many are in need of life support,” Spencer said.

“It’s all too common for middlemen in the trucking industry to push shippers to pay fuel surcharges, but only pass along a portion of those surcharges – or none at all – to the truckers who are actually transporting the goods and paying the fuel bill.”
Todd Spencer

Copy the Story Link