For Education and Furtherance of Associated Knowledge

Truckers feel effect of fuel costs

GENE JOHNSON ASSOCIATED PRESS

BOW, N.H.

The high price of diesel fuel nationwide is forcing some truckers and transport companies to pass on the costs or even keep their rigs off the road to stay afloat.

``Anybody who's operating with the prices this high is out of his mind,'' Mike McClellan, a 31-year-old independent trucker, said Monday. ``I don't like parking my truck, but that's an extra $440 or $450 a week that comes out of my pocket.''

The cost increase is most acute in the Northeast. The regional average rose to about $2.10 per gallon in mid-January from about $1 a year ago, according to the New Hampshire governor's planning office. Some large trucks average just 5.5 miles per gallon of fuel.

McClellan said fuel costs are forcing him to sell his truck and switch jobs. With the national average at $1.45 a gallon, transport companies are taking drastic steps, too.

``We're refusing to take freight into some of those high-priced areas,'' said Roy Romans, chairman of an Omaha, Neb., company.

``Where we can't get fuel surcharges that will cover the cost, we just turn down the business.''

Larger companies are avoiding the problem by hedging, purchasing huge quantities of fuel at set intervals to lock in the price.

That practice allows United Parcel Service to avoid imposing fuel surcharges, said Bob Godlewski, a company spokesman in Atlanta.

``We enter into contracts to buy fuel at a certain price for a certain delivery date,'' he said. ``If the price is higher on that date, we win; if it is lower, we lose.''

Experts say the high prices are the result of a sudden cold snap, low oil inventories and sustained production cuts by the Organization of Petroleum Exporting Countries. Some truckers suggested fuel companies are hiking prices to make up for slow sales during the fall, which was warmer than usual.

In the end, truckers said, consumers will likely foot the bill: Everything on a store's shelves came off a truck, and the increased costs will be reflected in market prices.

``Millions of people are affected by the trucking industry, whether you are buying a jug of milk or you want a bushel of corn hauled to town,'' said Michael Klasna, operations manager of LaBenz Trucking Inc. in Humphrey, Neb. ``The increase in the price of fuel has to go somewhere, and it will eventually go there if it has to.''

Linksky

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Things across this country smell rotten. Is Clinton setting us up for four more years?

-- Henry Howfambofergilfer (howfambofergilfer@hotmail.com), February 08, 2000

Answers

Looks like 6 more years to me.

-- JB (noway@jose.com), February 08, 2000.