“You fill up a diesel truck, you’re looking close to $1,000 right there,” Yates said.
Like truckers across Texas and the United States, Yates relies on a fuel surcharge to offset rising diesel prices. The surcharge is tied to per gallon prices reported by the Department of Energy. As diesel prices go up, transportation costs rise accordingly.
Yates logs about 140,000 miles per year hauling groceries from Temple to points across Texas. At $3.50 per gallon, that comes to about $81,000 per year. He said the fuel surcharge is “doing what it’s supposed to do,” but the effect of higher transportation costs is having an overriding economic impact on almost everyone.
John Esparza, president of Texas Motor Transportation Association, said because more than 75 percent of consumer goods are delivered by truck, high fuel costs create a ripple effect.
“As the cost of diesel continues to rise, the consumer will see as a direct result a rise in goods, everything from food to clothing to fuel itself,” Esparza said.
Phil McGuire, president of McGuire Transportation in Temple, manages a fleet of about 90 Freightliners that haul building materials and food products throughout Texas and the Southwest. He says they update the fuel surcharge weekly, and roll it into their customers’ shipping costs. But about 20 percent of the time, his drivers run empty - called deadhead miles. These trips don’t garner a fuel surcharge because there is no freight bill in the first place.
McGuire said he sometimes uses a broker to find backhauls, but the freight rates are usually lower.
“When you deal with a broker, you don’t normally get a fuel surcharge. It’s hit or miss.”
McGuire said single-truck operators who rely exclusively on brokers to find loads are slowly becoming an endangered species.
“The independents I know, it’s really hurting them. They’re starting to be phased out,” McGuire said.
To squeeze every drop out of a gallon of diesel, McGuire is installing small generators on his fleet. When a driver is napping in a rest area, or truck stop, rather than use a 400-horsepower diesel to cool or heat the sleeper, these auxiliary power units do the job nicely.
“One of them uses a lot less fuel,” McGuire said. “And instead of that big motor shaking the cab when you sleep, you have a small engine vibrating.”
McGuire said government should get more involved, and not let fuel prices continue to escalate.
The national average for diesel fuel increased more than 27 cents per gallon in the past two weeks, according to the Owner-Operators Independent Drivers Association. OOIDA executive president Todd Spencer said this is $1 a gallon higher than last year.
If prices don’t stabilize, Spencer foresees a slowdown in orders for durable goods, which means fewer loads for truckers. He says the “little guy”- small businessmen who own just one or two trucks - are in jeopardy of going out of business. Although the buyers of manufactured goods have to pay a fuel surcharge, Spencer said the brokers who match up loads with the independents often do not pass on the revenue to the independent trucker.
“In a lot of instances, these truckers are not seeing that money,” Spencer said. “It costs 70 cents per mile just for fuel. There’s no way you’ll survive with those types of numbers.”
Spencer compared some brokers to “rip-off artists” who take advantage of the little guy.
“That’s not necessarily true,” local broker Chuck Edwards said. “Some of our customers aren’t even paying a fuel surcharge.”
Edwards, one of five brokers of family-owned Triple T Brokers, said “super brokers” with offices in major shipping points across the country are cutting deals with major suppliers. The end result, he says, is cheap freight he won’t touch.
“We don’t haul the cheap stuff because the truckers need the money.”
Waiting on a load of groceries in Temple on Friday, trucker Yates said for now his position is fairly stable because he drives exclusively for one company, and they pass on the fuel surcharge to him. As for the independents, he ‘s not so sure.
“That’s the only way we can survive. Anybody who’s not getting it (fuel surcharge) they are hurting.”
