ATA Says Fuel Prices at 'Critical Point'
oaring fuel prices are at a "critical point" for the trucking industry, an American Trucking Associations official said Tuesday.
According to news reports, numerous school districts across the country are cutting classroom funds to cover the soaring cost of diesel fuel for their buses, ATA said in a statement.
But unlike school districts, U.S. trucking companies are also paying federal and state taxes on fuel, further increasing their costs, the group said.
“The motor carrier industry is on pace to spend $80 billion for diesel fuel this year, which is an astounding $18 billion more than in 2004,” said Bob Costello, ATA’s chief economist.“We are now at a critical point for the industry in terms of fuel prices,” Costello said. “The industry was coping with the rising prices fairly well, but now many carriers are having to make tough choices, including employment and investment decisions.”
“The more the industry spends on fuel, the less it has to hire new workers and invest in new equipment,” he said. “And unfortunately, I don’t see much relief in fuel prices in the future.”
Fuel is often the second highest expense for a trucking company after labor and can equal up to 25% of total operating expenses, ATA said.
The Department of Energy reports that the national average for diesel fuel now stands at a record high of $2.59 per gallon, up 71 cents from a year ago and there appears to be little relief in sight, ATA said.
While the year-to-date average of diesel is $2.22 per gallon, the U.S. Energy Information Administration recently predicted that this average price will rise to $2.29 this year.
Last year, trucks hauled 9.8 billion tons of freight, or 68.2% of all freight transportation tonnage. To move all these goods, the trucking industry had to consume more than 35 billion gallons of diesel fuel and over 15 billion gallons of gasoline.
