Truckers Struggle to Adapt to High Fuel Costs
MELISSA BLOCK, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
ROBERT SIEGEL, host:
I'm Robert Siegel.
And in this part of the program, a topic that we're all familiar with: the high prices of gas and diesel. On average, a gallon of gas is going for $2.61. That is 73 cents higher than a year ago.
BLOCK: And if you think it costs too much to fill up your set of wheels, just imagine what it costs to fill up an 18-wheeler. Soaring diesel prices are leading to a shakeout in the trucking industry. That may not be such a bad thing, as Rachael Myrow reports from member station KPCC in Los Angeles.
RACHAEL MYROW reporting:
At the Bandini Truck Terminal east of downtown LA, trucks of all shapes and sizes pull up to fill 'er up 24 hours a day.
(Soundbite of service station activity)
MYROW: According to AAA, the national average for diesel is hovering above $2.50 a gallon, and in California, prices top $3.
Mr. ARTURO MANUEL RODRIGUEZ APODACA (Truck Driver): My name is Arturo Manuel Rodriguez Apodaca(ph), or just Art(ph).
MYROW: Apodaca, or just Art, has been driving since he was 16 years old in 1971.
Mr. APODACA: I don't even know what the fuel's at. I think it's probably over $3, I hear. But I don't even know. Why do we look and see what it is? Oh, lookit, for cash, it's $2.95 and for credit, it's $3.03. And I never looked at it 'cause I don't pay for it.
MYROW: The company he works for, Southland Box Company, picks up the tab. The bigger the firm, the more likely it's bargaining for diesel discounts with truck stop operators. Some of the biggest freight companies even purchase diesel wholesale to get a better price.
(Soundbite of warehouse activity; horn beeping)
MYROW: The downtown LA warehouse of Dependable Highway Express, or DHE, a national trucking company. Operations manager Tim Tilessio(ph) says his firm is weathering the high diesel prices, but he contracts with a lot of independent so-called `owner-operators,' and many of them are not doing well at all.
Mr. TIM TILESSIO (Operations Manager, Dependable Highway Express): We'll have the onesies and twosies, if you will, the one--the driver that owns one truck or the driver that owns two are parking their trucks. It's becoming a problem, and it needs to be addressed.
MYROW: His colleague Wayne Carson, director of safety and security, adds the high diesel prices have come during a nationwide trucker shortage. Ever since federal deregulation of the industry in the 1980s, pay and working conditions for many truckers have been rolling downhill.
Mr. WAYNE CARSON (Director of Safety and Security, Dependable Highway Express): A fellow that used to make a halfway decent living, you know, driving the trucks, now they're selling their trucks and either trying to get on as a company driver or they're just getting out of it altogether and going into some other industry. The margins are close enough in trucking anyway with insurance costs, truck payments and so on and, you know, when fuel prices go up by--What?--25, 30 percent in a very short period of time, you know, all the sudden your margin is nothing.
(Soundbite of warehouse activity)
MYROW: But paradoxically, even a sky-high diesel hits the little guy hard. The labor shortage has put bargaining power back in the hands of big freight haulers. Steve Sturgess is editor in chief of Heavy Duty Trucking magazine.
Mr. STEVE STURGESS (Editor in Chief, Heavy Duty Trucking Magazine): No longer is the old rule of thumb that for every 10-cent rise in fuel, a thousand truck operators will go out of business. I think because fuel is expensive for everybody and capacity is quite tight in trucking--that is the amount of capacity to actually ship the freight--the freight haulers, the trucking fleets, are able to put fuel surcharges onto their freight rates and actually make those surcharges stick.
MYROW: Those surcharges can be up to 30 percent above the regular price for shipping goods from point A to point B. Steep, but if you have to have something on the store shelf or in the factory, you'll pay it. Sturgess says that means trucking companies, especially the big ones, are doing well enough to address the trucker shortage by paying them more.
Mr. STURGESS: Costs go up, wages go up and truck driving becomes quite an attractive job. And it used to be a truck driver earned, I think, three times as much as a hamburger flipper, and today, it's only twice as much. So there is some slack that needs to be taken up there.
MYROW: In the meantime, some plucky entrepreneurs are helping truckers shave pennies off their bottom line. For example, for $9.95 per truck per month, FuelAdvice.com will plan your route so you hit the cheapest truck stops. After all, no matter what you drive or who ultimately pays for the fuel, it's a matter of pride to seek out the best price possible. For NPR News, I'm Rachael Myrow in Los Angeles.