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Diesel Price Brakes Truckers

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By KEITH MORELLI | The Tampa Tribune

Published: March 24, 2008

SEFFNER - For the past couple of days, Gary Cunningham has hunkered down in the cab of his tractor-trailer along the south edge of the Citgo truck stop lot on U .S. 301.

On his laptop computer and cellular telephone, he's been trying to contract a run for his independent rig.

He had offers, but the pay was not enough because diesel fuel has reached record highs. Independent truckers and small hauling companies have a hard time absorbing that cost, and it has reached a near panic stage, he said.

"There's no profit in it anymore," Cunningham said. "I might as well go to work at Wal-Mart and stay at home every night."

While the rest of the nation is gagging at the thought of paying an average of $3.26 a gallon for unleaded regular, diesel fuel for the first time hit the $4 mark.

The price of diesel, driven up by demand in Europe and China, where diesel-powered vehicles are predominant, has reached a critical stage here, industry officials say.

Clayton Boyce, vice president of public affairs for the Arlington, Va.-based American Trucking Associations, said the diesel fuel price increase is the biggest crisis facing the industry.

"It's sending operating costs through the roof," he said. "Fuel is the No. 1 cost for trucking companies. It used to be labor, but now it's the fuel."

He said some smaller trucking companies have gone bankrupt, as have some independent truckers, and fuel is the reason.

Since it will cost more to bring products to the shelves, prices of everything from a Granny Smith apple to a John Deere riding lawnmower will be higher, Boyce said.

"The cost of fuel is definitely raising the cost of everything," Boyce said. "Everything you get in America is moved by truck at one point."

The trucking industry has taken some action, he said, from seeking legislative help to tinkering with the engines of big rigs.

"One thing is to reduce the speed of the trucks," Boyce said. "Most of our members, 77 percent, have speed limiters built into the engine. They can be set at any speed." The slower the speed, the less fuel used, he said.

"Right now, with fuel price crisis," he said, "members are turning limiters down a bit more." He cited one company that turned the limiters from 65 mph to 62 mph, and that is expected to save more than 4 million gallons of diesel a year.

Lobbyists representing truckers also have asked Congress to pursue exploration and retrieval of any oil supplies in Alaska, he said. That would lessen dependence on foreign oil and increase the domestic supply, he said.

According to AAA, the national average for diesel Sunday was $4.02 a gallon, almost 50 cents higher than a month ago and almost $1.25 a gallon more than last year.

AAA estimated the average price for diesel at $3.99 a gallon in Tampa.

Cunningham, the independent trucker from Michigan, said Florida is among the most expensive states to buy diesel.

It's enough to have sparked a word-of-mouth strike next week by independent truckers. Cunningham said he will turn the keys off and stay home at least a couple of days to protest the high price of fuel and the stinginess of those who pay to haul their products to market.

"Freight prices haven't gone up in years," Cunningham said.

For an independent trucker, the price of fuel is almost too much to handle. To fill up his rig, which, like most semis, gets about five miles to a gallon, he pays more than $1,000, he said. Last week, he topped off his tanks with 154 gallons and spent $613.

Cunningham has been an independent trucker for 20 years, he said, and runs a refrigeration unit delivering produce, mostly to distributors or grocery stores across the country.

Monday morning, he was on his laptop computer in the cab of his rig trying to negotiate a fair price to fill his truck with produce and haul it somewhere. He had been at it a few days and had not gotten an offer that would make any job profitable, with diesel so high, he said.

"Freight rates for the past 4 1/2 have not gone up" to match the increases in fuel costs, he said. In that period, the price of diesel has risen almost 70 cents a gallon.

Nearby, Johnny Wilson sat in the cab of his truck, an empty flatbed trailer behind him in the same Citgo parking lot. While reading the newspaper, Wilson of Birmingham, Ala., said he has been a truck driver since 2003, when diesel was less than half what it is now.

"This has two tanks that can carry 250 gallons," he said. Recently, he spent more than $1,000 on fuel. A full load of fuel can carry him 1,500 miles, he said.

He doesn't see the diesel price situation improving, he said.

"The freight rate is not going up," he said.

Wilson said his route takes him all over the Southeast, toting steel, he said. Florida has the highest prices for diesel fuel, he said, nodding toward the towering Citgo sign nearby that advertised diesel at $3.95 a gallon.

Some industry analysts say the price may ease as summer approaches because diesel fuel and home heating oil are similar. As the demand for heating oil drops with the rise in temperature, prices should dip, they say.

U.S. government statistics show that 65 billion gallons of diesel were used in 2007. And Americans burned 142 billion gallons of gasoline.

For most Americans in gasoline-powered cars who think the price of diesel doesn't affect them, they're wrong, said Gregg Laskoski, spokesman for AAA Auto Club South in Tampa. He said the higher diesel prices eventually will be passed on to the consumers of all goods delivered.

"People are seeing these increases in their grocery bills," he said. "The high price of diesel is going to drive everything higher, whether it's a gallon of milk or piece of produce. The price of transportation is always going to be passed on to the consumer."

Reporter Keith Morelli can be reached at (813) 259-7760 or kmorelli@tampatrib.com.

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