Truckers burdened by high diesel fuel prices
www.tcpalm.com By Nadia Gergis staff writer March 13, 2003
Morris Blackmon, an independent flatbed trailer operator from Texas, is being forced to spend the night in Fort Pierce.
The trucking broker he is contracted with won't pay enough, he said, to make up for the high price of diesel fuel he needs for his next pickup.
"Right now, I am going to wait for another phone call," Blackmon said in an interview this week at the Pilot truck stop. "My broker is not paying enough for me to move the truck."
With the prices of crude oil reaching a record-breaking high — Blackmon and his fellow truckers might be in for a long, bumpy road. This week, the price of a barrel of crude oil soared to more than $37 — the highest the country has seen since the Iran-Iraq War during the 1980s. Oil then reached $40 per barrel.
And the prices of crude might go even higher because of the possibility of war with Iraq, said Bill Bush, a spokesman for the American Petroleum Institute in Washington, D.C.
"It is all about supply and demand," said Bush. "We had a colder winter, so more refineries needed a greater-than-normal supply. Our supply from Venezuela was disrupted because of the strike, and we are still recovering from that."
According to the American Trucking Industry, the industry is suffering from one of highest diesel fuel price increases in the history of the United States. In Florida, diesel fuel this week hit an all-time high of $1.892 per gallon, according to AAA Auto Club South.
Because of the drastic increase, some truckers and suppliers are passing the bucks on to consumers by increasing surcharges on transported products.
"We have implemented a fuel surcharge in addition to our normal surcharge," said Jack Nicholson, treasurer of Armellini Industries, a Palm City-based trucking company.
"Unfortunately, that cost is being passed onto consumers, but we have no choice. We have to recover costs from somewhere," said Nicholson about Armellini, a floral distributor that runs 178 refrigerated tractor-trailers throughout the United States and Canada.
Armellini executives said they made the decision to tack on a 9 percent surcharge — $9 for every $100 in cargo hauled —after the company's profit margins declined sharply because of soaring diesel prices. When diesel prices were $1.15 a gallon last year, the surcharge was only 1.8 percent, Nicholson said.
"I have never seen prices this high," said Nicholson, who has been with Armellini for 25 years.
Businesses dependent upon the trucking industry also are seeing their bottom lines battered.
Laura Lewis and her husband, Bill Sellers, own Crossroads USA, a tire and trucking lube center in Fort Pierce. The couple opened the business last year, but are experiencing difficulties in maintaining a profit because oil prices are so high.
"We saw a big decline this week," Lewis said Wednesday. "Usually we do about 10 or 12 trucks a day, and we have only done two or three so far."
The ripple effects of high gas and diesel fuel prices could spread far and wide, eventually affecting retail and grocery store prices.
"For every dollar spent on freight transportation, 87 cents of that goes to trucking," said Bob Costello, chief economist at the American Trucking Institute. "If prices stay this high, we will definitely be paying more for products at the stores."