News
Trucker-Nomics
Going up?
As fuel costs rise, freight rates should, too

By Terry Scruton
senior writer

The year 2005 will go down as having the highest fuel prices on record - at least until 2006 rolls around.

Two disastrous hurricanes helped continue a trend that started in early summer and drove prices to new extremes this fall - above $4 a gallon in some areas after hurricanes Katrina and Rita.

It is impossible to predict what 2006 will hold, but Todd Spencer, executive vice president of OOIDA, said it doesn't appear to be getting any better.

"There's no reason to think fuel prices are going to drop very fast, very soon," he said. "Drivers shouldn't expect a whole lot of relief."

As of mid-October, many of the refineries and oil drilling rigs in the Gulf of Mexico region that suffered damage from the hurricanes were still far from being fully functional.

Something else was happening in October as well. There were more and more rumblings from drivers who said they were staying closer to home because of fuel prices.

Talk of a "silent slowdown" made its way through the trucking community, and some drivers found themselves refusing loads that they would have taken just a few months earlier.

One driver told Land Line that his father-in-law was leased to a company in Florida where drivers had shut their rigs down in early October and were refusing to move until they were paid the rates they needed to survive.

Choosy truckers choose profit
Spencer said what's going on is actually the result of truck drivers becoming a bit choosier.

"Operations are more precise and planned," said Spencer. "Guys have to be more selective about where they go and what they do."

That's what OOIDA member Coy Bedient is doing. Bedient said his broker doesn't even call him unless the load pays at least $2.25 per mile.

"People are finally starting to realize it," he said. "It costs 60 cents a mile just for your fuel. It's not just the fuel, either. Tires have gone up, oil has gone up and all the parts have gone up. So now, the maintenance has gone up too."

Another OOIDA member, Andy Soucy of Lebanon, TN, said that, after Katrina, he parked his truck for 10 days and waited for the fuel costs to come back down. He said he did the same thing a week after Rita hit when fuel prices started to rise again.

But then a funny thing happened.

"I had no intention of heading out for the next week or even two (after Rita)," he said. "But I found this FEMA load that just paid too damn good to pass up. Almost $3 to the truck for every mile, including deadheading back home."

Soucy said that, FEMA loads aside, he has still been able to find fairly high-paying loads in recent weeks. His secret is a simple one.

"I just ask for more money and don't waste my time with those who don't want to pay for my services," he said.

Attitude adjustment
Both Soucy and Bedient said the secret to getting the money they want is a combination of standing up for themselves and educating others about what it takes for truckers to survive.

"Right now it costs the average owner-operator approximately $1.10 a mile just to break even before paying himself," Soucy said.

Bedient said he's had to train his dispatcher the proper way to handle shippers offering cheap freight rates.

"You can't tell anybody that we can't haul their freight," he said. "What you must say is 'I'm sorry, we just can't haul your freight for that rate.' "

Bedient displays "Just Say No to Cheap Freight" stickers on the side of his truck. He said he believes those stickers send an important message.

"Once you put those stickers on your truck, you've made a commitment," said Bedient. "I cannot pull into a place with low freight and have them see those stickers and think that price is OK."

Soucy said that with fuel prices being what they are, it is more important than ever for drivers to stick to their guns. If not, the consequences could be dire.

"Sooner or later, (shippers) will pay me what I want," he said.   

"They won't have a choice as trucks find their way to the auction block because the drivers were to afraid to demand what they needed to survive out here."

terry_scruton@landlinemag.com

March/April
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