Article

A 'Fuelish' Situation

Prices soar and new ultra low sulfur diesel should kick them higher. ATA seeks to put a face on the problem.

June 2006, TruckingInfo.com - Editorial

by Deborah Whistler, Editor

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New ultra low sulfur diesel comes on line this month as fuel prices soar to record highs. On the near horizon are lower emissions engines to comply with 2007 regs. Never – even taking into consideration the fuel crisis in the late '70s, early '80s has the fuel situation been so critical.

What can fleets do to mitigate the impact?

Many have already stepped up truck purchases this year to avoid buying early 2007 engines – anticipating possible fuel economy and maintenance penalties from the newer engines. But there is speculation that ULSD will further degrade the fuel economy of current engines. So avoiding the new engines could bring its own fuel baggage.

Shutting trucks down when parked is an obvious – and immediate – solution. And most truck manufacturers have announced auxiliary power options to keep drivers cool in summer and warm in winter without having to idle the truck.

Driver training is also important to fuel economy. As engine performance becomes more complicated to meet stricter emissions criteria, the ability to drive for fuel economy becomes more difficult. The "sweet spot," where engines operate most efficiently, has become smaller. Spec'ing automatic transmissions can help.

But auxiliary power and automatic transmissions add to the price tag, as do new lower emissions engines. It's clear the trucking industry needs relief to continue to operate profitably and productively.

Fleet managers need to communicate their concerns to the media, local, state and federal legislators. The good news is that the general public and politicians should be able to understand this fuelish situation. Everyone has felt the impact of escalating fuel prices.

The American Trucking Associations offers the following "talking points," that can be used in letters to the editor and to legislators.

• Fuel costs pose the biggest threat to a fleet's bottom line because it represents the second-highest cost after driver wages. Fuel often accounts for up to 25 percent of the total operating expenses for a trucking company.

• The rising cost of fuel has the potential to create a ripple effect throughout the economy. If prices continue to rise, consumers will likely see higher costs for most everything they purchase. This is significant when you consider 80 percent of communities in the U.S. get their goods by truck.

• Commercial trucks consume 49.8 billion gallons of fuel each year. About 35 billion gallons, or 70 percent, is diesel. The remaining 30 percent is gasoline.

• A one-penny increase in the price of diesel annualized over an entire year costs our industry an additional $350 million a year.

• The Energy Information Administration recently reported that the national average price of diesel fuel increased to $2.897 per gallon – that's 67 cents higher than the first week of May 2005. For all of 2005, the national price averaged a record $2.402 per gallon, or an astounding 59.2 cents (32.7 percent) above the 2004 average. ATA is seeking input from truck fleet managers to help put a face on this problem.

"The American Trucking Associations is deeply concerned about the impact of diesel price increases on the motor carrier industry and on the national economy. In the face of continuing and dramatic increases in fuel prices, ATA is working to find solutions to this national crisis," said a spokesman.

ATA would like to hear first-hand from fleets about the fuel problems you are facing and how you are coping with the impact of rising fuel costs on your business. "We know that high fuel prices are affecting you, and we want Congress to understand it as well. Your story is important," ATA says.

By presenting your story to Congress and the media, they can begin to see how trucking operations are reacting and what they might expect to see from the industry moving forward.

E-mail your company's story to ATA's National Fuel Price Crisis Watch at fuelcrisis@trucking.org.

E-mail Deb Whistler at dwhistler@truckinginfo.com

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