Joint Statement from the National Truckers Association and the Ontario Trucking Association on the Current Diesel Fuel Crisis

TORONTO, Sept. 18 - This morning, NTA president Bill Wellman representing owner-operators and OTA president David Bradley representing carriers met in Toronto to discuss actions that could be taken by industry and governments to avert possible shutdowns in trucking services that have been called for this coming Friday. These discussions will be ongoing until tomorrow at the earliest. Until then, the associations will not be making any public statements to the media. Should the discussions meet with success, NTA and OTA will inform the media of a time and place for a joint news conference. Joint Statement from the National Truckers Association and the Ontario Trucking Association on the Current Diesel Fuel Crisis

http://www.transportnews.com/Articles/969369517

-- Martin Thompson (mthom1927@aol.com), September 19, 2000

Answers

I think this will be the next big story subject. When the truckers start parking their rigs because of high diesel fuel watch out. Think JIT.

-- Martin Thompson (mthom1927@aol.com), September 19, 2000.

Trucking Industry Hit Hard by Record-High Gas Prices Source: Knight Ridder/Tribune Business News Publication date: 2000-09-19

Sep. 19--It's just past two o'clock at the Hall Street Citgo gas station in St. Louis, and Tammy Reith, a trucker from Kansas City, has just put 153 gallons of diesel fuel in her truck. But before she set off for Springfield, Mo., with her cargo of liquor, she counted the cost of the recent surge in fuel prices. "At $1.59 a gallon, it comes out to $245," said Reith, flipping through several receipts. "A year ago, it might have been about $165."

Like many smaller trucking companies and their drivers, record increases in diesel prices have left Reith, who works with 100 truck- strong Jeffco Trucking in St. Louis, bearing the brunt of the cost.

In the latest figures from the U.S. Energy Department, the national average of diesel is up 2.4 cents from last week, at $1.653 per gallon -- a record price since the early 1980s, when adjusted for inflation. But analysts say the price could still be topped.

"The jury is still out," said Bill O' Grady, an oil analyst with A.G. Edwards & Sons Inc.

Trucking companies looking for a respite might not see it soon. Inventories for distillant -- the product used to make diesel fuel and heating oil -- are low, said Jonathan Cogan, energy information specialist with the Energy Department.

Since diesel and heating oil are sister products, an increase in the production of one cannot happen without the sacrifice of the other, Cogan said.

A cold winter could raise diesel prices even higher. Last winter, an early February cold spell in the Northeast led to an increase in the production of heating oil, thus decreasing the production of diesel. Prices spiked up about 10 percent in a few days.

National and international leaders are already planning to address this issue. On Wednesday, the Senate Committee on Energy and Natural Resources will hold a hearing on the price of fuels this winter. On Saturday, the G7 nations will be meeting in Prague, where oil prices will be among the topics being discussed, O'Grady said.

But whatever action the federal government takes, it might be too- little-too-late for the trucking industry. The price of diesel has risen almost 72 percent to date, from 96 cents per gallon in March 1999. Recent years have also seen companies increasing drivers' wages. Rates charged by the companies, however, have not changed much, said Don Boughton, a transportation analyst at A.G. Edwards.

The domino effect of a fuel price increase could lead to consumers having less money to spend because higher fuel prices could slow the economy, Boughton said. As such, truckers will make fewer trips to top up supplies at stores across the nation, leading to even more depressed earnings for trucking companies.

And in an analysis of diesel prices and bankruptcies of trucking companies in the last 10 years, Boughton found rising diesel prices led to more bankruptcies for trucking companies, usually six to nine months later.

He predicts "a record number of trucking failures in the third and fourth quarter this year, and . . . through the first quarter next year."

Fuel surcharges won't help, Boughton said, as they only help offset, and don't fully recoup, the increased cost of diesel.

All this leaves truckers worried, and Reith says that diesel prices are now a constant topic on truckers' CB radios. She said many have stories similar to hers -- soaring fuel prices caused Reith to fail to make her monthly truck payments, and she sold her own rig in July to work for Jeffco.

Unlike smaller companies and truckers like Reith, bigger trucking companies negotiate long-term fuel contracts and can defray part of the cost, said Don Schaefer of the Midwest Truckers Association. But they're still at the mercy of the skyrocketing prices.

"Anyone trying to lock in a price right now, they feel like they're gambling because the prices are fluctuating so much," Schaefer said.

Not all is grim for the industry, though. "There are companies that will continue to make money," Boughton said. "They won't do as well as they've done in the last couple of years, but those that are standing on the other side of this are the ones that will consolidate and do really, really well."

He expects Omaha-based Werner Enterprises Inc. and Knight Transportation Inc, based in Phoenix, to come through, and has "buy" ratings for both companies.

O'Grady expects a more-than-50 percent chance that the U.S. will announce it will dig into its oil reserves to lower the current fuel prices after the G7 meeting. If that happens, it'll be only the second time in history -- the first was after the first day of the Gulf War -- that the U.S. has used its reserves.

Meanwhile, with nowhere else to turn, Reith said she has even tried e- mailing President Bill Clinton about the fuel prices.

The result? "No response," she said without hesitation. "It's not like he even cares."

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp? story_id=14012603&ID=cnniw&scategory=Transportation

-- Martin Thompson (mthom1927@aol.com), September 19, 2000.

Wednesday, Sep. 20, 2000

September 17, 2000 Ontario independent truckers threaten to strike over high fuel prices OSHAWA, Ont. (CP) -- Ontario's independent truckers are warning they will shut down their industry on Friday unless the provincial government does something about soaring fuel costs. "We're giving them until Friday midnight to respond," said Heather White, an organizer for the National Truckers Association, which represents about 1,700 truck drivers, after a strategy meeting here Sunday.

Bill Wellman, association president, said that if a strike occurs, truckers would be asked not to block highways. But Wellman who spoke during a strategy meeting here Sunday, added he could not guarantee what their actions would be. NTA spokesman Keith Swayne said Ontario Transportation Minister Al Palladini had promised to meet with federal officials if a strike was postponed.

Truckers were also to meet this week with the province to press demands for lower fuel taxes and higher trucking rates, Wellman said.

http://www.canoe.ca/OntQueTicker/CANOE-wire.Truckers-Protest- Warning.html

-- Martin Thompson (mthom1927@aol.com), September 20, 2000.