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Saturday, September 4, 2004

Truckers ease pedal to save


Record-high diesel prices strain transport costs

By Anna Guido
Enquirer contributor

Gasoline prices hit a peak early this summer and then started dropping. But truckers haven't been so lucky.

Diesel prices hit an all-time high two weeks ago. The high cost is raising transportation costs for businesses - and it has drivers worried.

chart Elsmere tractor-trailer driver Steve Eckenrode, for example, won't keep the engine running on his rig anymore when he stops for the night. That means he'll be sleeping in a cold cab during the winter - and a hot cab in the summer.

"In an eight-hour night, you're going to burn about 10 gallons of fuel," Eckenrode said. "It adds up."

Drivers for FedEx Ground are tightening routes and making sure vehicles are well maintained so they're running efficiently as possible, said spokesman David Westrick.

Again, the pennies add up. FedEx Ground has 16,000 vehicles on the road every day.

Jeff Little, an independent truck driver who lives outside Dayton but works in Greater Cincinnati, is driving at "more reasonable speeds" and easing up on the pedal to try and recoup the extra $80 a week he's been spending on diesel fuel since June.

"It's really outrageous," Little said.

The average price of diesel reached a record high two weeks ago at $1.87 per gallon, 37 cents higher than the same time last year. The price fell last week for the first time in 10 weeks, according to the U.S. Energy Department's Energy Information Administration.

Tavio Headley, staff economist with the American Trucking Associations in Alexandria, Va., said the skyrocketing price of crude oil - the basic raw material for diesel fuel - is a key reason for the increase.

But the improving economy and the resulting demand for trucking services also are boosting diesel fuel prices, Headley said. "When the economy is improving, there is a need to move more goods and raw materials across the country because consumers are spending more," he said.

Owner-operators hit hard

[img]
Steve Kittle, a local driver with RAM Nationwide, Inc., fills up a tank from the on-site pumps at RAM's terminal.
(Enquirer photo/MEGGAN BOOKER)
Eckenrode, 43, has driven trucks for 14 years, mostly for trucking companies that pick up the fuel tab.

But last week, Eckenrode and a friend decided to buy a truck of their own, joining the ranks of owner-operator truck drivers who are among those hit hardest financially when diesel fuel prices soar.

"Every week, they're spending more and more on their fuel, so it takes away from their profits," said Char Schwab, safety director for RAM Nationwide, Inc., a mid-size trucking company on North Bend Road in Carthage.

RAM Nationwide has 50 or so drivers. About half are company employees and the rest are owner-operators. Schwab said all drivers are paid on a per-mile basis, but owner-operators are paid more to cover expenses that company drivers don't incur, such as fuel and vehicle maintenance.

The company is trying to beat the diesel price increases by purchasing fuel in bulk for use by all of its drivers. The company installed fuel pumps on site this spring.

"We're trying to help ourselves," Schwab said. "We're saving a couple of cents per gallon."

Todd Spencer, a former truck driver and executive vice president of the Owner-Operator Independent Drivers Association in Grain Valley, Mo., said fuel prices have played havoc with the trucking industry for several years.

"It's weeded out a lot of truckers from virtually every size company," he said. From 2000 to 2002, about 250,000 trucks were repossessed nationally, Spencer said.

Because of the smaller fleet, fruit and vegetable growers in Western states are feeling the pinch and fear there are not enough trucks to get their product to market, Spencer said.

Farmers, construction affected

Farmers and construction workers also use diesel fuel for a variety of their equipment.

Texas farmers are paying as much as $6,000 a month for diesel fuel to run irrigation pumps during a dry spell, each load costing 20 percent more than a year ago.

However, truckers continue to be among the largest users of diesel fuel. The industry uses 34 billion gallons of diesel fuel a year.

"Just a one-cent increase would cost the industry an additional $340 million a year," said the trucking associations' Headley.

The higher prices - which are expected to continue through the end of the year - couldn't have come at a worse time. That's because the trucking industry's busiest time of year - Christmas - is just around the corner.

"It's kind of odd that you have this huge amount of industry growth going on at the same time diesel fuel prices are skyrocketing," Kentucky Motor Transport Association President Ned Sheehy said.

Sheehy said surcharges added onto a bill for delivery of freight can help truckers maintain their level of income.

"But what this does is increase the cost of freight, which increases the cost of goods sold to consumers," he said.

---

The New York Times contributed. E-mail annag376@aol.com




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