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Wednesday, Aug. 31, 2016

Fuel costs impacting truckers

Monday, March 10, 2008

Independent truckers, businesses being forced to make unwanted cuts

SIKESTON -- Rising fuel prices seem to be hitting everyone.

But the increasing cost of diesel -- which had a national average of $3.67 a gallon this week, up $1.03 from last year, according to the Energy Information Administration -- is pinching the pocketbooks of trucking companies and independent drivers.

"We're just having problems staying alive with the fuel prices as high as they are," said Joyce Henderson of Jim Henderson Trucking in East Prairie.

She said the rising fuel prices are one of many commodities that are going up, such as groceries and insurance. "We could stand it there for awhile, but there are just a lot of things hitting now at once," said Henderson. "But the fuel is the main problem, now that it's up to almost $4 a gallon."

Issues like that are forcing independent truckers and businesses alike to make cuts.

Butch Barnes, owner of TH Transport Inc. in Bernie, said it's difficult for smaller companies to demand fuel surcharges, and manufacturers don't want to pass costs onto the consumers, so the drivers and owners are losing the most.

"We have to absorb it and cut our costs," said Barnes. "A lot of the owner/operators have had to drop their insurance."

That's one cut he's had to make. IRA plans provided for workers there have also been put on hold, and some office staff, as well as supplies, have been cut. "We had to cut to the bare minimum just to keep our doors open," said Barnes.

Henderson said she and her husband as well as their two sons who work with the company have cut back, too. They're even running routes at a marginal profit to keep alive. "You can't afford to turn down the load," she said.

Richard Cannon, a broker with C & H Brokerage in Sikeston, who serves as a middleman between manufacturers and truck drivers, agreed, and said that sometimes there is even a loss.

"There's still some freight out there that's $1 per mile," said Cannon. "With that, you go in the hole."

As a broker, it has hurt Cannon, too. A year ago, he was paying drivers a $1,500 fuel advance for a trip to California. Now, the amount is $2,500.

Not only that, there is often a 60 or 90 day holding period between the time a load is delivered and payment is made. But the drivers still depend on their checks in a more timely manner, so brokers such as Cannon are out that money for a short time.

The current state of the industry is causing some people considering over-

the-road driving independently to rethink their plans, said Sharon Peebles, owner and school director of the Show Me the Road truck driving school in Matthews.

"That's down considerably," said Peebles, adding that some have backed out. However, enrollment is up for contract training, where a company pays for a person to go through the class in exchange for a contract to work there for a specific amount of time, she said.

Peebles also blamed the dreary outlook on fuel prices. And it's only expected to get worse, she said, with projected prices of more than $4 by mid-

summer, she said.

The woes aren't just limited to truck drivers or owners, though. When they have less money, it hurts the economy as a whole, Peebles pointed out. For instance, less spending money leads to less purchases at the fueling station, she said.

Henderson even said that she and her husband have had to cut back in several areas, including their grandchildren's Christmas gifts.

Since these drivers travel quite a few miles in a week, every penny increase in fuel prices hurts. Barnes said his 17 trucks burn about 10,000 gallons of fuel. So for each cent that diesel prices rise, it's another $100 in fuel costs.

Over the past year, those involved in the freight industry have hoped for changes that haven't come. Instead, prices keep shooting up.

"If something doesn't happen soon, bankruptcy is the only remedy," said Cannon. He knows of several companies and individuals that are "on the edge" of filing.

Barnes is operating in the red right now, and said most other trucking firms in the area are, too. "If they're in the black, I'd be surprised," he said.

"Everyone is operating in the red," Henderson agreed.

Those involved said something needs to be done -- and soon. "If something's not done within the next month or two, I don't see how anybody can hold out," she continued.

To help remedy the problem, the government will have to step in, Cannon and Barnes agreed.

"The government has got to put some low interest money out there," said Cannon. "The trucking companies have already borrowed all that they can."

Barnes said that diesel prices need to be lowered and frozen in to help the ailing business, too.

"They could cap the price instead of raising it," said Henderson. "Or just give the truckers a break."