"Most Truckers Are One Major Breakdown Away From Bankruptcy"
The price of a gallon of diesel has risen two bucks in a year, from $2.50 to $4.50. The escalation threatens to decimate the U.S. trucking industry. The New York Times tells the tale: "More than 45,000 vehicles, or 3 percent of the tractor fleet, have disappeared from the highways since early last year, according to America’s Commercial Transportation Research in Columbus, Ind." And we're not just talking about the small independents, neither. "In the first quarter, 935 of these larger operators [five trucks or more] shut down, the American Trucking Association reports, up from 385 a year earlier and the highest quarterly failure rate since the 2001 recession." The knock-on effect: the used truck market is glutted with abandoned rigs. "There are so many used trucks in dealer lots now that some of the larger dealers have stopped buying them,” said salesman James McCormack of www.truckertotrucker.com. “From what dealers tell me, exports have become their best outlet, particularly to Russia.” High diesel prices, a weak dollar and thousands of U.S. trucks are shipped to our former Communist enemy. Ain't capitalism grand?
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“Most truckers are one major breakdown away from bankruptcy” Alternatively, one angry shot inbound or outbound from Iran. You think price increases have been steep so far...
As a truck driver in a different segment I am amazed at the willingness of independent owner operators to take on all sorts of risk for minimal reward. The only way you can earn a decent living as an O/O is to get away from the commodity hell of most segments and get into something specialized with higher barriers to entry. In a good year if everything goes right you get to drive a somewhat nicer truck and earn the same as a company driver. In a bad year you can end up working for free and flirt with bankruptcy. $5/gal diesel is going to dramatically change how supply chains operate. Longer lengths of haul are going to continue to ride the rails. There will be pressure on Congress to allow longer and heavier trucks. With few exceptions we have not built any new rail infrastructure in the US in post WW2. This could change soon.
Drove to the next town yesterday. Most truckers were running below the speed limit a little. A few in a rush but not like before... Alot more private vehicles at the speed limit too. Still examples of the 80 mph crowd but not "most" of them like before. So is the news falling fuel prices in the near term going to change anything? Maybe I am supposed to begin planning big vacation trips again now... Really feels like we're a bunch of puppets on a string. Every little problem around the world is an excuse to run up the price of oil. Even if prices do fall soon I think America ought to take this as a warning shot and start really consider how we choose to live and consume in the future. I still maintain in the long term China, India and other countries like them will drive prices ever higher. We are seriously looking at how we can change how we do business - who we buy from and how it gets here. I'd like to do more of what we've been doing all along and that is buy more locally produced food and goods but alot of the local business is long gone. At least the farmer's market is still here.
Any word on how the European truckers operate with the higher cost of fuel there? Higher economy? Higher shipping prices? Lighter equipment?