Canada Truckers complaining about high petrol prices

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Sky-Rocketing Fuel Prices Driving up Trucking Costs, Prices

January 21, 2000

As the OPEC countries continue to drive up world oil prices, truckers are reeling from further dramatic increases in the cost of diesel fuel prices, forcing them to seek another round of fuel surcharges. The cost to fill up a typical tractor fuel tank today is around $370 before taxes, compared to $199 a year ago. On a per kilometre basis this translates into increased costs of five cents per kilometre (before taxes), or $7,000 annually. Fuel costs represent anywhere from 5% to 30% of a trucking company's operating costs, and is second only to labour.

In recent days, the rack price of diesel fuel in Ontario has skyrocketed to 32.6 cents per litre (before taxes, marketing and delivery costs). At this level rack prices are 106% higher than they were in the first week of February 1999. Recent increases are among the highest seen since the time of the Gulf War in 1991, and there appears to be no end in sight.

The impact of the escalating fuel costs on the industry's slim profit margins is being compounded by a severe qualified driver shortage that is visiting increased costs on many motor carriers. Fuel surcharges sought by carriers (which are consistent with the recent recommendation from the Freight Carriers Association of Canada) have been in the range of 2.5% to 2.75% for less-than-truckload (LTL) shipments and up to 6.5% for truckload (TL) shipments. In addition, some carriers are reportedly seeking general rate increases of up to 5%. Shipper acceptance of the surcharge is reportedly mixed, but according to OTA president, David Bradley, "the days of the shipper maintaining or padding their margins on the backs of motor carriers are over."

"Trucking is a derived demand industry. With the amount of freight being generated by the economy, there is not much unused capacity in the Ontario trucking industry. Some companies are even having to park trucks because they can't get qualified drivers. That, combined with the increased costs of fuel, means that if shippers want to continue to receive the high level of service from their carriers that they have become accustomed to, they should expect to pay a fair price." Trucks haul about 90% of all foodstuffs and consumer products in Ontario and over 80% of Ontario's trade with the United States is shipped by truck.

Link to story:

http://www.ontruck.org/news/releases/2000/pr00-0124-01.htm#TopOfPage

-- Carl Jenkins (Somewherepress@aol.com), January 25, 2000

Answers

You OTR-smart guys clue me in: refrigerated trucking I'd guess would be even more expensive: anybody got the delta cost factor?

It would be ironic, indeed, if frozen goods became unaffordable/scarce over fuel costs. Instead of pasta, I shoulda been stocking up on meats and frozen items.

-- lisa (lisa@work.now), January 25, 2000.


"As the OPEC countries continue to drive up world oil prices,.........."

OPEC is not responsible for the recent price increases,but apparently that is the sheeple accepted spin.For all intents and purposes .gov has found a scapegoat.

-- Dragnet (just@the.facts), January 25, 2000.


Bold off.

-- Dragnet (just@the.facts), January 25, 2000.

here's some Clinton stuff>/a> on this.

-- lisa (lisa@work-reallyhomeduh?.now), January 25, 2000.

Right, , meant to close the tag.

-- lisa (lisa@work.now), January 25, 2000.


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