 LiberalTrucker contributed this post for Masslogics Trucking News. The recent housing crises, floods, tornadoes and the war in Iraq have not really helped the American economy. Billions of dollars have already spent on the war in Iraq and there is no end in sight. Prices of food, water, electricity and gas have all gone up. Almost every State in the country is affected by this recession and there is no solution in sight. In the US many people think it is just the housing industry that has been affected but the trucking industry has taken just as big a hit. And this is just the first signs of trouble.
The price of diesel has gone up many folds in the past few years. Almost every trucker can confirm that there is a major slowdown in business and this has affected entire communities in the US.
Current estimates from the American Trucking Industry indicate that nearly 1000 small trucking firms go out of business every time diesel fuel prices push up more than a dime.
Profits are so thin that most small time truckers have very little margin to sustain the losses. This is partly because of the millions of truck drivers available and the administrative costs. So any small increase in the price of fuel makes it difficult for the small carriers to exist. Transmitting the higher costs of fuel to customers does not normally work as the customers usually go somewhere else, see Don’t Take that Load Part II
The larger trucking companies have some leeway and are able to maintain some profits by passing the costs to shippers who eventually pass the high costs to the average consumer. However, this has not also worked since most consumers have really cut down on spending.
The future of the trucking industry is not clear and appears bleak. Unless the government eases regulations and allows more refineries, there are many more businesses that will join the truckers.
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