Home Back Issues April 2011 Trucking industry copes with rising costs

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

Rapid ascent

March 2014
Tuesday, February 25, 2014
IMG 4255-2BY AMY MILSHTEIN

Kelly Dachtler, president of The Clymb, redefines outdoor retail.


Read more...

What I'm reading: Brad Smith & Travis Boersma

March 2014
Tuesday, February 25, 2014

Brad Smith, founder of Hot Pepper Studios, and Travis Boersma, president of Dutch Bros. Coffee, share their recent reads.


Read more...

Spring thaw

News
Thursday, April 17, 2014
Spring ThawBY JASON NORRIS | OB BLOGGER

The “polar vortex” of 2014 seems to have finally thawed and we believe this change in weather will bring more sunshine to the U.S. economy as well.


Read more...

Revolution in print, pixels and passion

News
Tuesday, March 11, 2014
RyanFrankNewsBY MARK BLAINE | OB BLOGGER

The publisher of the Emerald Media Group moves on, leaving a cutting edge media group that depends on business acumen for its survival.


Read more...

The 2014 100 Best Companies to Work for in Oregon

News
Friday, February 28, 2014

100best14logo ThumbnailThe 21st annual 100 Best Companies to Work For in Oregon list was announced Thursday night at an awards dinner at the Oregon Convention Center.


Read more...

Are millennials reshaping politics in the Pacific Northwest?

News
Wednesday, April 02, 2014

MillennialsThumbA new report explores the impact of millennials on Oregon's business and political climate.


Read more...

The more they change, the more they stay the same

March 2014
Tuesday, February 25, 2014
100-best-collageBY BRANDON SAWYER

The 100 Best Companies get more creative with perks and more generous with benefits; employees seek empowering relations with management and coworkers.


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