Trucking is not an easy industry to work in, especially if you’re one of the people who operate a rig. You face long hours on the road with nothing but the radio for company, trying not to fall asleep at the wheel as you power your way across the country to deliver your cargo.
If you’re lucky, you work for a company that offers insurance benefits (many just insure their trucks). But if you work for yourself, you likely don’t have access to these extras (or you pay an arm and a leg for them). You also have to deal with wacky weather and road conditions, the difficulty of finding places to stop for food and fuel, the discomfort of sitting in a cab day and night when you’re on duty, and of course, the dangers associated with any job that leaves you in a state of constant sleep deprivation. But one of the worst parts of the job for many in the industry is the onus of paying for diesel fuel, which is often more expensive than regular gasoline.
Any industry that deals in transportation is likely to suffer from similar problems as the prices of fuel continue to rise. But truckers, especially those that own and operate their rigs independently, face serious hardship when the price of diesel goes up. This is because the cost of fuel is coming straight out of their pockets. When they contract for work hauling freight, they generally receive set terms for the contract (which may include a certain price per mile or something similar). That means they are not necessarily reimbursed for the total cost of fuel. In short, the more they pay for gas the less they are earning in the long run.
And while many truckers utilize a variety of tools to find the best prices on diesel (frequenting stations that have had low prices in the past, calling other truckers in the area for referrals, and more recently, checking smart phone apps that show locations and prices for diesel) they simply may not have much choice in the matter (not all stations carry diesel and at some point they’re going to have to refuel, regardless of prices). So when the price of diesel gets jacked way up, the ones who really suffer are the truckers themselves.
Of course, those who work for a trucking company will be reimbursed for whatever expenses they have (at least for fuel). But when the cost to the company becomes too high, they may be forced to change their business strategy (potentially leading to layoffs). Companies that can’t lower their bottom line will either end up cutting back or going out of business, both of which spell disaster for the truckers they employ.
In addition, those who hire the trucking companies to transport their goods may balk if the cost is passed on to them. They could end up going to competitors to get better rates, selling locally, or opening up new manufacturing plants in areas that they normally ship to (this is especially tough on for-hire truckers with their own rigs since they generally have to charge a bit more for their services in order to make ends meet, while a company that operates several trucks can spread out costs). So when the cost of diesel increases, the effect on shipping businesses and their employees can be significant (and generally undesirable).
Carol Montrose is a writer for The Truckers Report where you can read the latest trucking news, speak with other truckers in the owner operator forum and freightliner forum, or learn more about engines like the Cummins ISX.
© 2011, Truck Drivers News Blog. All rights reserved.
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U.S. diesel prices through April 1, 2013
For a larger version of the chart, click on the image.
New York NY – May 20, 2011 – On May 23rd, 2011 from 1:00-2:00pm Eastern truckers are being asked to pull their trucks to the side of the road for one hour to gain the attention of Washington and focus it on soaring fuel prices. Over regulation, the lack of new exploration, and the lack of refining capacity near Cushing, OK are believed to be responsible for the higher diesel prices.