Logistics News: As Independent Truckers Plan Brief Strike to Protest Rising Fuel Costs and Lower Wages, It is Likely Many Must Leave before Things get Better

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- April 1, 2008 -

Logistics News: As Independent Truckers Plan Brief Strike to Protest Rising Fuel Costs and Lower Wages, It’s Likely Many Must Leave before Things get Better

Independents may Vent Some Steam, but Impact will be Minimal; the $1200 Fill Up

SCDigest Editorial Staff

SCDigest Says:

Diesel fuel now exceeds $4.00 per gallon along the West coast, which means filling up the 300-gallon fuel tanks of some trucks now exceeds $1200 – ouch!

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Long brewing on trucking-oriented message boards, there are loosely organized plans for a brief “strike” today by independent truckers getting hammered by a combination of slowing demand and rising fuel costs.

The word is being spread over the Internet and by the old trusty CB radios. While the Owner-Operator Independent Drivers Association is disassociating itself from the move, it is expected that some drivers are planning to refuse to accept loads for a few hours early Tuesday, and more such actions may follow later in the week.

The goals are somewhat vague, and range from simply calling attention to the problem to asking for direct government action, such as suspending federal and state fuel taxes until prices drop again and changing rules regarding insurance premiums for class 8 trucks.

Fuel Costs Main Trigger

The main complaint of independents, thought to represent about 9 percent of total over-the-road drivers, are rapidly rising diesel fuel costs, which are directly eating into their pocketbooks – sometimes in a dramatic way. Those fuel pressures are, of course, exacerbated by the slowing economy and reduced freight volumes, adding to downward pressure on rates (See Current Transportation Capacity Glut is Forcing Many Independent Truckers out of Business.)

But fuel costs are the main catalyst of the angst and anger right now for independents and medium and larger trucking companies. Diesel fuel now exceeds $4.00 per gallon along the West coast, which means filling up the 300-gallon fuel tanks of some trucks now exceeds $1200 – ouch!

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The American Trucking Association, which in general represents the interests of mid-size and larger carriers, last week called for President Bush to release oil from the Strategic Petroleum Reserve in an effort to decrease fuel costs through increased supply, amidst what it characterizes as a “fuel price crisis.” On its web site, the ATA says it “is working to find solutions to this national problem by ensuring that trucking -- the backbone of the American economy -- does not break.”

The problem is especially acute for independents, which have less ability to collect fuel surcharge revenues to compensate for rising diesel costs, because they generally don’t deal with the shipper directly. Many are calling for more “transparency” in fuel surcharge billing and compensation, believing that many of their direct customers, such as brokerage firms, 3PLs, and larger trucking companies, are taking a slice of those fuel charges that should rightfully be theirs, killing their profitability.

The reality is that the action is likely to have little real impact and that conditions for independents likely won’t get much better until a good number of them leave the market, restoring better balance between supply and demand between shippers and truckers.

That’s the view of independent owner-operator John Larsen of Mad River Transport in Dayton. He recently told SCDigest that, “I have been in transportation over 30 years and I think there will be very few new owner-operators, period. When the current number of owner-operators is gone, I think there will be very few younger guys to replace us as older guys like me are warning new kids to stay out of trucking and railroading (I have been in both) unless there is no other choice to survive.”

Should shippers care about the plight of independent truck drivers? Do you think “strike” actions would have any real impact? Would you favor a suspension of fuel taxes on diesel? Let us know your thoughts at the Feedback button below.