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Diesel Prices Bite into Trucker Profits

Posted on: Saturday, 27 August 2005, 00:00 CDT

Aug. 27--If you think you're paying a lot for gas, try putting yourself in the shoes of Charles Doyle, a trucker from Wichita Falls.

Mr. Doyle recently paid more than $550 to buy diesel fuel for his rig's twin 150-gallon tanks, which weren't even empty when he started pumping.

All told, he spent some $4,500 on fuel last month, about $1,000 more than what he would have paid a year ago for the same amount of diesel.

"When diesel prices go up, I take a pay cut," said Mr. Doyle, who typically carries pipe, steel, lumber and other building materials. "When they go down, I get a raise. But lately they've only been going up."

The super-consumers of U.S. roads have had it with soaring fuel prices. While rising gasoline prices affect all motorists, higher diesel prices are guzzling money from independent truckers' livelihoods.

"Say you have a short-haul load for $1,000," said Byron Cline, another Wichita Falls trucker, who was walking Friday with Mr. Doyle through the Great American Trucking Show at the Dallas Convention Center. "Before, maybe carrying it cost you $200 in fuel. Now it costs you $300."

To be sure, rising fuel costs aren't derailing the transportation industry. As trade grows, so is demand for all kinds of shipping services.

Indeed, trucking executives warn of a trucker shortage, saying the U.S. economy needs thousands of new drivers to move all the cargo. Transportation, and trucking in particular, is one of the "brightest shining spots" in the U.S. economy, said Mark Zandi, chief economist at Economy.com in West Chester, Pa.

"It's not only occurring domestically, a lot of the growth is being driven by very strong global trade," he added. "Economies like Dallas, in the middle of that supply chain, will benefit."

Faced with diesel prices that surpass $2.50 per gallon in Dallas and ranging even higher in some parts of the country, many trucking companies have passed on fuel surcharges to customers. So large retailers and other shipping customers shoulder part of the cost.

Demand is so great for trucking services that many companies are even able to implement so-called "deadhead charges," if they have to travel long distances with an empty trailer, said Ward Mayer of Memphis-based investment firm Morgan Keegan & Co.

"If they have to take a load for them but the truck comes back empty, the client has to pay for those empty miles," he said. "Normally, they don't get paid for empty trucks."

But many truckers say surcharges vary widely, and not everyone pays. Even when they receive extra money, it's still hard to keep up with soaring fuel prices.

"It just goes from excruciating to unbearable and back to excruciating," said Oregon-based trucker Lee Klass, who owns an 18-wheeler with fuel tanks holding 240 gallons. "In a week, the surcharge is all used up."

Can costs be cut? Mr. Klass rides a bicycle whenever he can, even carrying it with him on his rig.

Danny Block, a Fort Worth trucker, scours the Internet for the best fuel prices on his expected route. He also tries to run his truck at lower speeds to save fuel.

Mike Williams, a trucker from Conroe who drove 130,000 miles last year, spent $200 on equipment that's supposed to boost his mileage from a gallon of diesel.

His drive for fuel savings is even spilling into his home life, as he puts up with slightly higher temperatures indoors to save on air conditioning.

"I have a car in the garage I don't use that much. Do I really need it?" he said. "Somewhere, somehow, we're going to have to change the way we're living."

The National Biodiesel Board, based in Jefferson City, Mo., says a growing number of truckers are using biodiesel, a fuel derived from fat or vegetable oil. Backers say it helps the environment, reduces U.S. dependence on oil imports and cuts truckers' fuel bills, though critics question such claims.

A company backed by country music legend Willie Nelson began retailing a mix of biodiesel and petroleum diesel at Carl's Corner off Interstate 35 near Dallas last year. Willie Nelson Biodiesel has since opened other pumps at truck stops nationwide.

For now, however, such efforts are just getting started. And many truckers are just barely getting by.

"Every time I pull in to fill up, that's about $500 or $600 out of my pocket," said Don McKinley, a trucker who makes regular runs between the Cincinnati area and California. "It's about to put me out of business,"

By Brendan M. Case and Angela Shah

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Source: The Dallas Morning News

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