WI: High gas prices affect food, safety and delilveries

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High gas prices affect food, safety and delilveries By Karl Ebert of the Northwestern

Increases in gas has also effected diesel fuel which most school buses and transportation outlets use. Oshkosh school students exchange buses in the Town of Algoma.

May 11, 2001 by Joe Sienkiewicz

William Dougherty's frustrations are rising weekly - just like the price of gas.

Dougherty, president of Badger Federal Services Inc., isn't just frustrated by his trucking company's growing gas-related cost of doing business.

His deeper frustration lies with the lack of action to address gas price and supply issues in Washington following last year's summer price spike and continuing pressures that have pushed the price of diesel fuel up 50 percent from two years ago.

"Two years ago, Congress spent more time and effort on ATM fees than they have on fuel prices," Dougherty said. "That's a one-ticket item and it doesn't affect my neighbor if I use the machines, but this affects everyone. It will increase the prices people pay for just about anything -all the goods that all the trucks move - but they (Congress) haven't had that level of conversation about fuel prices."

The retail price of diesel fuel in Oshkosh ranged from $1.64 per gallon to $1.68 per gallon on Friday.

In the short term, the increase in prices has forced Dougherty to forego what had been annual new equipment purchases for his 85-truck fleet.

In previous years, the company replaced 10 percent of its trailers a year. That would have meant 30 new trailers in the past 18 months. Instead, it's zero.

"For me, as a businessman in the trucking industry, I don't see the light at the end of the tunnel and that's really sad," Dougherty said. "There's going to be a washout of those companies that aren't financially sound. I just don't know what the answer is, but it's not short-term fixes."

Badger Federal's hauling contracts include a fuel surcharge provision based on federal calculations of the average price of diesel fuel. The surcharge is intended to buffer haulers from fuel market changes. But because the calculations lag behind the fuel market by up to six months, the surcharge rarely represents the actual cost of diesel when costs rise, Dougherty said.

Higher prices in the Midwest than in other parts of the country also keep the surcharge out of step with the actual cost of doing business.

In the short run that means a lack of money to invest in new equipment, but in the long term it means trucking companies will have to begin passing their costs to customers. In the end, those costs will mean higher prices for retail customers of finished goods.

"It will follow. I don't care if it's in textiles or the floor mat you buy for your home. It will follow," he said.

Dan Mueller, store director at the Koeller Street Pick 'n Save, said increased grocery prices as a result of the higher cost of moving goods are likely - it's just a matter of time.

"Nothing's changed yet, but I'm sure it will as the prices continue to grow. It takes a little bit of time and right now, it's only been a few weeks," Mueller said.

That's not quite the case at Hrnak's Flowerland and Gifts, where suppliers already have tacked a 6 percent to 8 percent surcharge on plant shipments.

But that increase pales in comparison to the $3,000-per-month increase in the cost to heat greenhouses this spring, said owner Dave Geurden.

"The cost to heat the greenhouses was off my radar screen until this year," said Geurden, who upgraded to energy-efficient greenhouses during the oil crunch of the 1970s.

"We were not going to increase anything this year, but then, when the gas bills started coming in, we had to raise the price of about half our products," he said.

It's not just the private sector that will be hurting. After filling up their own vehicles, taxpayers likely will pay more for Winnebago County's gas, too.

The Sheriff's Department has 26 squad cars to fuel and seven other cars to pick up and transport overflow jail prisoners to other county jails -- some 40 miles away.

Sheriff Michael Brooks said fuel costs were 26 percent over budget last year because of high gas prices. This year budget planners made adjustments but may not have been prepared for the looming surge.

"We did increase it based on what we believe to be a continued increase in gas prices," Brooks said. "But I can tell you we did not anticipate it going beyond a couple dollars a gallon. So if it does go beyond that, it will have a substantial impact on our budget."

Karl Ebert: (920) 426-6688 or kebert@smgpo.gannett.com


-- Martin Thompson (mthom1927@aol.com), May 14, 2001

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