Runaway gas prices threaten careersgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Runaway gas prices threaten profit margins, even careers Published Monday, March 20, 2000
By Kevin Smith
Rob Duke has worked as a commercial truck driver for more than a decade, but soaring diesel prices are about to send him to the unemployment line.
On Friday, the 36-year-old driver made a pit stop at the Travel Centers of America truck stop in Ontario after dropping off a load of canning materials in Norwalk.
"Unless something changes, we'll go bankrupt in 90 days," said Duke, who works for the Henderson Express trucking company in Henderson, Ky. "The owners have added a 5 percent fuel charge, but they're still eating half the delivery costs."
Duke's predicament reflects a growing crisis that has gripped the trucking industry and other businesses as gasoline and diesel prices approach stratospheric levels.
Diesel prices have risen steadily since March of last year when the Organization of Petroleum Exporting Countries cut crude oil production by 7.5 percent, or more than 2 million barrels a day, to boost prices that had fallen to 12-year lows.
The cost of gas at California pumps has risen by more than 28 cents since last month, according to a study by the Automobile Club of Southern California.
On Friday, gasoline prices in the Inland Valley hovered around the $1.70-a gallon mark for regular and $1.89 for premium.
Last week, the statewide average for a gallon of regular unleaded gasoline was $1.739 a gallon, and premium was $1.931 a gallon, according to statistics provided by the U.S. Department of Energy.
The average cost of regular unleaded fuel has risen 38 cents a gallon since Jan. 3. Premium unleaded has gone up 36 cents a gallon.
The numbers were compiled through a telephone survey that includes a sample of 38 California service stations.
Diesel fuel prices in Southern California have climbed from $1.15 a gallon in January of 1999 to more than $1.709 a gallon, according to other statistics provided by the OPIS Energy Group.
Lynne Kraus, who owns Archibald Flowers in Rancho Cucamonga, is keenly aware of the fuel crunch.
"Our gasoline bills have been creeping up for the past couple months and it's starting to get really bad," she said. "We used to spend about $700 a month on gas, but now it's up to $1,100 a month."
Kraus said she's going to have to raise the shop's minimum order from $25 plus delivery to about $35 plus delivery.
"We make about 40 to 50 deliveries a day," she said. "We do some to Covina, Colton and San Bernardino, but we're reconsidering that with the gas prices I it's just too costly."
Mike Winter, a delivery driver for VIP's Pizza in Upland, also has been hit by the rising prices. Winter is paid an hourly wage plus 50 cents for each delivery he makes.
"It's getting expensive," the 18-year-old Upland resident said. "I drive a Chevy S-10 pickup, and it's costing me $25 to $30 to fill it up. It used to take between $15 and $19."
VIP owner Cathy Shannon acknowledged she may have to increase the 50-cents-a-trip gas allowance.
"I don't want to start losing drivers because they're using more gas than I'm reimbursing them for," she said. "We've thought about increasing it, but we haven't yet."
Trucking companies are grappling with rising fuel costs on a bigger scale.
"Our industry has been hit really hard," said Valerie Liese, president of Jack Jones Trucking Inc. in Chino. "Three or four months ago, we were spending about $7,000 a month on gas, but now it's up to almost $11,000 a month."
Smaller trucking firms are having an even tougher time, Liese said.
"If they have only one or two small truck loads a day going out, they may wait and consolidate them," she said. "If they raise their prices, they can't compete with the larger trucking companies."
Oscar Sepulveda, a spokesman for United Parcel Service's West Coast air hub at Ontario International Airport, said the fuel crisis hasn't hurt the company's air service - yet.
"We buy our jet fuel a year or more in advance," he said. "All of the fuel we're using for 2000 was contracted for a long time ago."
Sepulveda said UPS is firmly committed to fuel conservation. He said 30 percent of the company's fleet of delivery trucks at the airport uses compressed natural gas. He said more than 1,000 UPS trucks nationwide use the same system.
UPS is also experimenting with fuel-conserving vehicles that are both gas and electric powered, he said.
No one has been hit harder by the gas crunch than independent truckers.
Don McKinney, who has worked as an independent driver for more than 30 years, said the rising cost of diesel fuel has cramped his style.
"It's made me tighten up," the 58-year-old Tyler, Texas, native admitted as he cooled his heels at the Ontario truck stop. "I can't stay in motels as much and I can't spend as much money in the diner. I can't drink as much cold beer on my off-duty hours."
-- Martin Thompson (firstname.lastname@example.org), March 21, 2000
Good article Martin...some good points made here.
-- (Dee360Degree@aol.com), March 21, 2000.