Higher Diesel Prices Squeeze Trucking Industry
Posted on: Wednesday, 7 September 2005, 15:00 CDT
Sep. 6--WATERLOO -- While rising gas prices are hitting consumers hard in the wallet, trucking companies are feeling an especially tight squeeze.
According to AAA, the nationwide price for a gallon of diesel fuel was $2.81 Friday. One year prior, the price was $1.90. A gallon of unleaded gas was $2.87 on Friday, compared with $1.85 on year ago.
LeRoy Gray, CEO of Gray Transportation in Waterloo, said such an increase has hit his company hard.
"It has affected our operation costs tremendously," Gray said.
Tom DeJaeger, vice president of Zephyr Transport in Waterloo, said such increases in gas prices have caused his company to be more careful with business practices.
Due to the contracts these trucking companies have with their clients, fuel charges are not easily covered. Most of the contracts trucking companies have with their clients have fuel surcharges built into the contract. These surcharges allow the trucking companies to charge a little extra should the price of gas rise.
Even so, the trucking companies end up eating most of the increased cost with the cost of gas rising higher than the surcharges recover.
"We don't receive near 100 percent of the extra costs that are incurred," Gray said.
On top of that, some of the businesses that trucking companies deal with don't want even the surcharge added to the bill.
"There's people out there who don't want to give it to you," DeJaeger said.
Still, with little relief in sight from high gas prices, DeJaeger said companies will have to get used to paying for higher fuel costs for carriers.
"It becomes a matter of who you do business with," DeJaeger said.
"They're going to have to accept it or find themselves another carrier."
In the meantime, DeJaeger and Gray say their companies are working on educating their drivers on how to conserve fuel. DeJaeger said his company is encouraging its drivers to contain their idle time, which can reach up to 35 percent or 40 percent of the vehicle's in-use time.
Gray is telling his drivers to go one step further.
"We're trying to encourage our drivers to shut off their trucks when they're not in use," he said.
Also, Gray is working on reducing the company's deadhead time, which is time the company spends traveling without hauling anything. Gray said deadhead time makes up about 15 percent of his company's travel time.
"That's 15 percent of our miles that we're not being compensated," he said.
Gray also told his drivers to be mindful of where they park their trucks. He has had a few instances where gas has been siphoned out of his drivers' tanks.
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Source: Waterloo Courier
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