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Drivers feel diesel pinch

With prices hovering near $4 a gallon, big rig drivers are driving at a loss

POSTED: April 24, 2008 5:00 a.m.
SCOTT ROGERS/The Times

Juaquin Rodriguez of Custom Transport removes a worn tire from a wheel as he prepares a truck for a new set Thursday afternoon at the McBrayer Road trucking firm. The recent skyrocketing cost of diesel is causing much grief in the already expensive trucking industry.

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In his 40 years in the trucking business, Jim Syfan has never seen it this tough.

Syfan, who owns a truck center on Old Candler Highway, said his business is off 27 percent. On top of that, he has customers who have left him holding the bill.

"I have guys who owe me $20,000," Syfan said. "They’re not bad guys, they’re just in trouble."

Trouble seems to be an apt description of the situation facing the trucking industry. The national average price for a gallon of diesel fuel this week was $3.95. That’s a 111 percent increase from a year ago. The prices by region vary from $3.89 a gallon along the Gulf coast to $4.14 in the central Atlantic states.

Companies paying for truck shipments are being assessed fuel surcharges that are evaluated daily, but some drivers, especially owner-operators, say the money is not enough to pay their costs.

For example, if a driver is being paid $1.40 a mile for a full tractor-trailer load, plus a 45 cents per mile fuel surcharge, he makes $1.85 a mile. But some argue their costs, including maintenance and taxes, is upwards of $2 a mile and they are losing money.

"Some drivers are putting their maintenance dollars in their fuel tank," Syfan said. "They are continuing to wear the equipment out and they are in survival mode."

He said that price increases for fuel are outpacing the formula companies use to calculate the fuel surcharge.

"Because all shippers are paying the same price for diesel, those prices will get passed through the supply chain," said Jeffrey M. Humphreys, director of the Selig Center for Economic Growth at the University of Georgia.

"Right now, profit margins for shippers and truckers are under tremendous pressure because there is a delay in the process of passing along the fuel cost increases and the industry is getting squeezed," Humphreys said.

But a spokeswoman for a driver’s association said the trucker, who is paying higher costs at the pump, does not always get the higher payment.

"Even if the shipper is paying a fuel surcharge, it doesn’t mean the independent trucker ever saw any of that money," said Norita Taylor of the Owner-Operator Independent Drivers Association based in Grain Valley, Mo., suggesting someone in the middle may be keeping part of it, or not passing it on at all.

The association is seeking legislation that would mandate that fuel surcharges be passed through to the trucker.

"We know there are some members who have sold their truck to go to work for a company as a company driver," Taylor said. "Others have simply parked their trucks because they cannot find rates to cover their costs."

Bobby Banks, a Hall County commissioner, is owner of Custom Transport, a trucking company with 42 trucks in Oakwood. The company uses a combination of owner-operators and company trucks.

"There are anywhere from 2,000 to 2,500 owner operators going out of business every month because of fuel prices," Banks said, adding that he has heard of companies with a fleet of five trucks or more closing their doors.

Banks said paying fuel surcharges is not a given, and some companies balk at the higher charge. He said there are trucking companies willing to take the business, even without the surcharge.



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