Trucking News: ATA calls on White House to tap Strategic Petroleum Reserve
By Jeff Berman, Senior Editor -- Logistics Management, 4/1/2008
ARLINGTON, Va. — In a letter to President George W. Bush, American Trucking Associations (ATA) President and CEO Bill Graves called on the White House to release oil from the Strategic Petroleum Reserve (SPR) in an effort to curtail the ongoing, historical run-up in crude oil prices that are hampering various sectors of the U.S. economy and the trucking industry.
“As the price of oil skyrockets, it not only devastates truckers but their customers as well, many of which are mom-and-pop stores, and ultimately the consumer,” Graves said in his letter to the President. “We are very concerned that out-of-control energy prices will greatly magnify our current economic slowdown and delay our economic recovery….Please help not only the trucking industry, but the entire economy by trying to burst the bubble in the crude market by releasing oil from the Strategic Petroleum Reserve.”
The letter comes after the ATA projected a record high diesel fuel bill for 2008, stating that the trucking industry is on pace to spend $135 billion on fuel in 2008—based on current fuel price forecasts. The ATA also said this estimate represents a $22 billion increase over the $112.6 billion spent on fuel by the trucking industry in 2007.
Crude oil is consistently being priced at more than $100 per barrel, and this run-up has forced motor carriers to make fuel their top operating expense rather than labor, according to the ATA.
The current situation regarding escalating oil and gas prices may have a long-lasting and damaging effect on the trucking industry, according to Cliff Lynch, president of C.F. Lynch & Associates, a Memphis-based supply chain and logistics consultancy.
“For a long time we have lived with this [increasing oil and gas prices], but we really have not worried about it too much,” said Lynch. “It is not like it is just a few more cents per gallon we are talking about anymore. It is getting to the point now where it is a serious drain on the motor carriers, especially the owner-operators with 200-to-300 gallon tanks to fill for $1,000 or more per truck.”
ATA Spokesman Clayton Boyce said that the current situation has been “very difficult” for many small trucking company owners, which has forced some to park their trucks and others to consider filing for bankruptcy.
“The smaller the company, the bigger the effect is generally what we are seeing,” said Boyce. “The smaller carriers tend to not be as effective is padding along the costs of the fuel to shippers.”
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