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Wednesday, July 2, 2008

Truckers Slammed by High Fuel Costs

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If you think that commuting to work is becoming too costly, consider what truck drivers are facing with $4-plus gas and diesel. “We’re just hanging on; it’s a struggle,” said Kathy Paul, office manager at Badger Freight Service Inc., which operates 12 refrigerator trailers out of Milwaukee. “It’s costing the guys a dollar a mile just for fuel. Nobody can afford to update their equipment because they’re spending so much money on fuel.”

Truckers recoup some of their costs with fuel surcharges, which are passed on to consumers. But surcharges only cover part of the trip. Many trucks return empty and operators are eating the fuel costs. “Most of our trucks are averaging 5 or 6 miles per gallon. There’s not much more they can do to change that,” Paul said. “They’re slowing down when they can, and not idling their engines as much as before, but that’s about all they can do. A couple of our guys have steady routes to Maine and one to Florida.

They’re paying $3,000 a week just for fuel. It’s mind-boggling how much it costs.” Skyrocketing costs contributed to 935 trucking companies filing for bankruptcy in the first quarter of this year, the highest number since the record levels of 2000 and 2001, according to investment firm Avondale Partners LLC. More troubling, the average size of a failed company has increased to 45 trucks this year, up from 20 to 35 trucks in 2000-2001.

Meanwhile, the technical innovations that improve gas mileage for the rest of us remain out of reach for truckers, and likely will for some time. “I hear talk of various innovations—compressed air, bio-fuels, hydrogen fuel cells—but those are way off in the future,” said Norita Taylor, media affairs coordinator for the Owner-Operator Independent Drivers Association, an industry trade group. For now, she says, truckers can only pass on added costs to the rest of us.

Gas-electric hybrid technology, the hottest trend in passenger cars, is a relative newcomer to the trucking industry. International truckmaker Kenworth begins full-scaleproduction this year of gas-electric hybrid medium-duty trucks that seamlessly switch between diesel and electricity when driven under 30 mph.

But the benefits are limited to municipal fleets, utility companies and short-haul delivery—situations that involve much starting, stopping and idling. Kenworth estimates fuel savings of 30%.

Wisconsin Kenworth will demonstrate its new hybrid medium-duty truck on Aug. 26 at 9350 S. 22nd St. in Oak Creek. Call 761-5959 for more information.

Definition of the Week

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(Source: Economist.com.)