Trucking industry copes with rising costs

| Print |  Email
Articles - April 2011
Wednesday, March 23, 2011

 

0411_Trucking
Oregon truckers are coping with rising fuel prices and gas taxes.

A new gas tax and soaring crude prices are prompting Oregon truckers to innovate to protect their bottom lines while passing on as much cost as they can to consumers.

“Everybody’s doing this,” says Scott Smith, a VP at Salem-based May Trucking, which operates nationwide. “This is a game you have to play to continue to be efficient and be a player.”

For May Trucking, that means adjusting routes for fuel efficiency and limiting trucks’ idle time — and tracking both by satellite. It also means surcharging customers to compensate for fuel increases.

May Trucking employs about 500 Oregon truckers — the most in the state. Its size allows it to afford to use satellites, receive about a 10% discount from wholesale fuel vendors and apply a surcharge.

Not so for many of the little guys, says Debra Dunn, head of the Oregon Trucking Association (OTA). Many of them have to eat the rising fuel prices to be competitive. But they can still save through innovation, such as using onboard computers, to monitor fuel efficiency. Or they can resort to usual tactics: efficient rerouting, choosing the most profitable loads and avoiding mountains and snow.

When Oregon legislators voted to increased the gas tax by 6 cents in 2009, hopes were that the economy would have recovered more substantially since the tax went into effect in January 2010. And no one foresaw a series of revolutions in the Middle East that have threatened to push crude prices to $150 a barrel.

“It hurts,” says Marie Dodds, spokeswoman for AAA of Oregon and Idaho. “When the price of diesel shoots up 18 cents in one week as it did [in March] that’s a pretty steep increase to your bottom line.”

Yet, the OTA supports the gas tax, saying the $300 million a year in road projects funded by the tax are important.

May Trucking estimates it will pay $300,000 in new gas taxes. While the company supports the infrastructure repair, it calls the tax unfair because trucks that haul logs are exempt. “This just makes it harder to do business in Oregon,” Smith says.

If fuel prices keep rising more quickly than trucking companies can absorb, they’ll continue to pass on what costs they can to to customers, says University of Oregon economist Tim Duy. “If it’s none," he says, "then the pain will tend to center in the truckers.”

For some in the industry, that could become a fight for survival.

COREY PAUL
 

Comments   

 
Sell it here? Make it here.
0 #1 Time to screw the oil speculators.Sell it here? Make it here. 2011-04-18 11:44:52
There is PLENTY OF OIL - we just allow Wall Street to speculate on it.

Just you watch - two or three months from now, someone will pull the plug - and prices will plunge - just like 2008.

We just keep allowing these asset bubbles... What was it Dubya said about being fooled?
Quote | Report to administrator
 

More Articles

Top stories in 2014

The Latest
Thursday, December 18, 2014
10-listthumb

2014 was a year of wild contradictions, fast-paced growth and unexpected revelations.


Read more...

Raising the Stakes

February 2015
Monday, January 26, 2015
BY LINDA BAKER

The 2014 Bend Venture Conference set a record for the most cash, investments and prizes awarded at an angel conference in the Pacific Northwest. Investments in the six winning companies exceeded $1 million. The 11th annual conference was hosted by Economic Development of Central Oregon.


Read more...

The short list: Holiday habits of six Oregon CEOs

The Latest
Thursday, December 11, 2014
121214-xmaslist1BY JACOB PALMER | OB DIGITAL NEWS EDITOR

We ask business and nonprofit leaders how they survive the season.


Read more...

Corner Office: Steve Tatone

January-Powerbook 2015
Saturday, December 13, 2014

Seven tidbits about the president and CEO of AKT Group.


Read more...

Labor Pains

February 2015
Monday, January 26, 2015
BY AMY MILSHTEIN

Thinking about starting an internship program? Be careful. Navigating unpaid internships can be tricky.


Read more...

Carbon Power

February 2015
Tuesday, January 27, 2015
BY LINDA BAKER

Researchers in a multitude of disciplines are searching for ways to soak up excess carbon dioxide, the compound that contributes to global warming.


Read more...

The short list: 4 companies engaged in a battle of the paddles

The Latest
Thursday, December 04, 2014
pingpongthumbBY JACOB PALMER | OB DIGITAL NEWS EDITOR

Nothing says startup culture like a ping pong table in the office, lounge or lobby.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS