Editorial: Rising Prices, Rising Economic Woes

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img src="/sites/default/files/images/articles/printeditiontag_new.gif" width=120 align=right>Diesel prices just keep climbing, and the woes they engender keep spreading. Now the average price for a gallon of diesel in the United States has reached a new record of $1.753, which is 58 cents a gallon higher than a year ago and more than 35 cents higher than just before Christmas.

The high prices are leading fleets to shutter their doors and owner-operators to abandon their vehicles. On a broader scale, the high price of fuel is weighing heavily on the national economy and could help send us back into recession.

Comments that have been sent to Transport Topics’ Web site, TTNews.com, give us a look into the pain many fleets and owner-operators are feeling, and the resistance they meet when they try to pass fuel surcharges along to shippers or brokers.

Even when customers agree to pay more for having their freight hauled, one writer told us, “we do not cover our increased expenses because there is no surcharge on the fuel we use for deadhead miles, idling time or reefer fuel.”

The higher prices for diesel and gasoline mean that the trucking industry spent almost $500 million more for its fuel last week than it did in the corresponding week of 2002.

ndustry estimates are that no more than 75% of the costs of higher fuel are successfully passed on to customers by trucking, leaving fleets to cover the shortfalls.

American Trucking Associations took a two-pronged offensive to help the industry. President Bill Graves again urged the Bush administration to release fuel from the Strategic Petroleum Reserve in order to put downward pressure on prices by boosting supply. And, in a series of letters to state attorneys general, Graves sought a nationwide crackdown on fuel-price gouging.

Graves asked the state officials to “vigorously investigate and prosecute those responsible” for gouging, and urged the Federal Trade Commission to assist the states’ efforts.

In a letter to Energy Secretary Spencer Abraham, Graves said, “America’s motor carriers just can’t afford such an uncalled-for economic burden at a time when we’re working to help lift up our economy.”

Abraham had indicated previously that the administration wasn’t likely to tap the SPR unless hostilities break out in Iraq.

Fuel price increases since December are likely to lead about 3,500 trucking fleets to close their doors. And many more fleets are barely hanging on.

The industry needs help now.

This article appears in the March 10 print edition of Transport Topics. Subscribe today.