The American Trucking Associations called on the Commodity Futures Trading Commission to increase transparency in energy markets and restrict speculation by establishing aggregate position limits
. Steven Graham, vice president at Schneider National, represented the association in a testimony Wednesday.
Graham encouraged the commission to take these actions in order to reduce volatility and make sure commodity prices are related to market fundamentals of supply and demand.
"Diesel fuel is the lifeblood of the trucking industry, and sudden fluctuations in operating expenses, especially fuel, can devastate trucking companies," Graham said. "Increasing transparency and setting position limits while preserving the ability of commercial entities to hedge fuel purchases will strengthen the link between commodity prices and market fundamentals."
Because commercial trucks use over 39 billion gallons of diesel a year, a one-cent rise in the average price of the fuel could cost the trucking industry an additional $397 million a year in fuel expenses. In 2008, the industry accounted for $151 billion in fuel purchases, a $36 billion increase from 2007 and more than double the amount spent in 2004.
Since nearly 80 percent of U.S. communities rely solely on the trucking industry to deliver food, clothing and medicine, these high fuel prices will most likely trickle down to the consumer, the ATA says.
To read Graham's testimony, click here.