Trucking news: Talk of an April 1 trucking shutdown gains momentum
Jeff Berman, Senior Editor -- Logistics Management, 3/27/2008
WALTHAM, Mass—Speculation about a possible trucking shutdown on April 1 has been gaining momentum recently, according to media reports and Internet discussion boards.
The shutdown, which would be conducted primarily by owner-operators, is in response to the current run-up for diesel gasoline prices. Nationwide, diesel is currently averaging $3.989 per gallon and has gone up 70.9 cents in the last five weeks—all of which have been record-breaking—according to the Energy Information Association, a unit of Department of Energy. And in some parts of the U.S. diesel is already exceeding the $4 per gallon mark.
What’s more, the American Trucking Associations (ATA) called on the White House earlier this week to release oil from the Strategic Petroleum Reserve (SPR) to curtail this ongoing historical run-up in crude oil prices, which continue to hinder myriad segments of the U.S. economy and freight transportation—especially trucking—in general. And last week the ATA projected a record-high diesel bill for 2008, noting that that trucking industry is on pace to spend $135 billion on fuel in 2008—based on current price forecasts. This estimate, said the ATA, would be a $22 billion increase over the trucking industry’s $112.6 billion 2007 fuel tab.
Even though the media and Internet reports on this potential strike indicate that the reason behind it stems from truckers being fed up with current diesel prices, some people feel this strike is not a good idea and would send the wrong message.
“I don’t think it would be a very good thing for our country at all,” Department of Transportation Secretary Mary E. Peters told CBS 4 in Denver. “And if the strike is because of high oil prices, I think that would be taking an action that would affect American businesses and American consumers for something they don’t have a direct relationship to.”
Despite Peter’s sentiment, it appears that it may be falling on deaf ears when it comes to owner-operators. On a trucking Website entitled “Trucker to-Trucker,” Dan Little, owner of Little and Little Trucking LLC, who goes by the handle of Trucker Dan, is calling for truckers to shut down for one day, beginning at 8 a.m. on April 1.
He added that from that time striking truckers will not accept any loads at any price until the Federal Government admits and puts into action a plan that will give all owner-operators some help. He said this government help should come in various forms, including: suspending all federal and state fuel taxes until the economy recovers; having the federal government create an oversight committee to oversee insurance premiums charged for Class 8 truck insurance; and to stop allowing large trucking fleets to self-insure, which would create a more level playing field for all trucking companies, among others.
Another trucker on the same site said that “the price of fuel has increased exponentially over the last several months and oil companies, transportation companies, brokers and others all seem to be recouping their costs plus profit while the trucker continues to be squeezed from all sides as a producer delivering the goods and as a consumer attempting to support a family. The profit pie does not seem like it is being divided fairly.” He added that freight brokers never reveal their individual truckload profits, but few are going out of business, while many independent truckers and small companies are struggling to meet ends meet.
If this shutdown were to go on for any longer than one day, it may have a very negative trickle-down effect on shippers’ supply chain operations and processes.
“This is not a minor deal,” said David Schneider, Logistics Management Contributor and President of supply chain and transportation consultancy David K. Schneider & Company LLC. “When you consider any of the major truckload guys, 10-to-15 percent of them and maybe more use owner-operators. And then you have smaller 3PLs and brokerage operations that have contracted to provide services for bigger players, and almost half of their stable is going to be owner-operators.”
While it asked the White House to tap the Strategic Petroleum Reserve, the American Trucking Associations is not supporting the strike.
“We would not participate in or condone any strike,” said Clayton Boyce, ATA vice president of public affairs and press secretary. “It is hurting the wrong people and would not accomplish what they want to accomplish. We are taking a different tact in fighting the high price of diesel.”
While talk of the shutdown continues to gain momentum, it is not clear how many owner-operators will actually be participating, according to Norita Taylor, a spokesperson for the Owner-Operator Independent Drivers Association (OOIDA). Taylor told LM that percentages of those [OOIDA member drivers] participating or parking is not something that can be pinpointed since many members have indicated they do not intend to participate, adding that the OOIDA has no confirmed number of participants.
“What we’d like to see happen is for Congress to enact legislation mandating 100 percent pass through of fuel surcharges and transparency in those transactions,” said Taylor. “When prices on the stores shelves go up, it is not because of truckers. They are often not seeing these rises trickle down to them because of brokers or middlemen.”
While the owner-operators may be taking a stand with this shutdown, Eric Starks, president of FTR Associates, a transportation research firm, says its overall impact may be minimal.
Starks said it likely will be broad-based, noting that it may be comprised more of isolated incidents in certain pockets of the country, where owner-operators feel more compelled to do it.
“I have a hard time believing it will be widespread and spread beyond the owner-operators and even then it would be difficult for most of them due to the current situation…because most of them can’t afford to not drive and lose money.”
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I have been in every phase of the trucking industry, from company driver to owner operator, to company owner and am currently a 3PL.
The truckers are right in what they are doing, but as to getting results from it, pretty doubtful. This shutdown will be mostly owner operators and some truckers with one to five trucks. Most of them produce haulers.
What has to be done is to shut down the rail piggyback yards. If they can stop the rails from loading and unloading then and only then will the government wake up and may help not to appease the truckers but to get the freight on rails running again. Tying up the rails stops the imports and exports from moving across country as most of these containers move by rail, UPS an d Mail moves coast to coast on rails as does most produce from California to the North Eastern Markets.
Yes I say you can shut down your trucks but in stead of them sitting in your yards block the rail yards and container yards.
Truckers should not pay more tax per gallon of fuel then the rail road does. Truckers pay a road tax, a fuel tax, in NY a extra ton mile tax, tolls, single state registration fee, state agent fee and the list goes on and on.
Each time fuel goes up the tax goes up as the fuel tax is on a percentage. NY has a cap at 2.00 on fuel tax, so should the Federal Government and every state and city.
It is in the best interest of the government that oil goes up as the tax revenue goes up with it.
It is time to open the reserves, if we cannot open refineries, or dig for new oil, and only depend on such stupid things like low, low sulfur diesel to clean the air then why will we need the reserves in 200 years the alternate fuels will have kicked in by then or at that time we will know how to drill with out hurting the environment and that oil under the ground will become our reserve
No one is mentioning that the new low, low, sulfur diesel that we have to use on the road and china, India etc does not take the fuel mileage on a class 8 tractor down to 4.9 miles per gallon from the 7 miles per gallon we got on pre 2007 trucks as well.
Les Howard - 2008-31-3 11:52:00 EDT -
I think the only recourse is for the independents to shut down.My husband is a speciality hauler, he hauls yaughts. He has been losing money for months he would bring home a better pay working at a mc donalds flipping burgers, then loose all his profit on fuel. This is a sad situation for him ,he has built his career over 19 years now. We need help from our government.
Patsy Kennedy - 2008-31-3 08:53:00 EDT -
I am asking all Americans and limit driving. Don't go to the drive through windows car pool as much as posible don' plan any trips this summer and all over the best thing woild be is to sit home for a week and than we all will see a big difference .
