EYE ON TRUCKING: Fuel a big issue around the world

By LYNDON FINNEY
The Trucker Staff

7/14/2008

Scattershooting while wondering what happened to $4 a gallon diesel prices…

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Find a fellow trucker, close your eyes and have him or her read the following to you.

NEWS ITEM: Truckers have disrupted food and fuel supplies in three-day-old protests over rising fuel prices. In spite of governmental action, unions representing the strikers vowed to press on.

One of the industries hit hardest by the strike — automobile manufacturing — warned that if the stoppage continues the entire industry may halt because parts for assembly are not reaching factories.

The strike is being waged by self-employed drivers, who represent an estimated 20 percent of the countries trucking industry.

NEWS ITEM: Tens of thousands of truck drivers have staged a one-hour strike to protest government plans to raise highway tolls.

A protest organizer says more than 100,000 truckers parked their trucks along roads and in parking lots throughout the country.

NEWS ITEM: Truckers are back at work after reaching a deal with the government to end their protest over soaring fuel prices. The national association of gas stations says it will take three days to replenish stocks after many pumps ran dry. The truckers voted late Wednesday to accept a government package of measures to offset high fuel prices. The measures include lower highway tolls and tax breaks.

The organizer says rising fuel costs and inflation are hurting the trucking industry.

NEWS ITEM:  Thousands of truck drivers launched a strike to protest surging oil prices, threatening to paralyze the country's major seaports and cause severe losses to exporters.

About 13,000 unionized truckers stopped work, demanding the government increase fuel subsidies, help raise transportation charges and introduce a minimum wage.

"Yes, this is mostly about rising oil prices. We can't drive trucks as we'll shortly run into red figures," said a union spokesman.

He said non-unionized truckers have also increasingly joined the strike, as they also have been suffering from a lack of government measures on rising fuel costs.

Now open your eyes and let your fellow trucker tell you that the first item came from Spain, the second from Poland, the third from Portugal, the fourth from South Korea.

It ought to give you some comfort — albeit not much if you can’t afford a tractor with an OEM comfort system or an auxiliary power unit or have funds for an IdleAire slot — that our peers around the world are fed up with the current trucking economic situation, too.

We certainly don’t advocate anything as drastic as a strike, but we hope the folks at all the industry affiliated companies, organizations and associations are working hard behind the scenes to prevent a total collapse of the transportation system.

We know that sound pretty far-fetched, but a year ago, so did $5 a gallon diesel, and that’s what we’re facing this year.

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We woke up the other morning and heard our friend and respected energy expert Mary Novak of Global Insight being interviewed on an ABC radio newscast.

Mary, who’s generally looks on the brighter side of any situation, sounded worried, so later that morning, we called her.

And she is worried.

Mary thinks the price of oil could be at $150 by the time or shortly after you read this, and that the average price of diesel could be as high as $5.25.

Mary continues to warn the industry that only a drastic reduction of 6 or 7 percent in diesel consumption will lower prices, and right now, consumption is only 1 to 2 percent lower than last year, Mary says.

Furthermore, she’s not very optimistic we can cut consumption the needed amount.

Mary points to the diesel refining margin as a tell-tale sign of why prices are so high.

The refining margin is simply the difference between the cost of refining diesel and what the refinery gets paid.

The more competition for the diesel, the higher the margin, and thus, the higher cost at the pump.

Mary shared with us that the refining margin when we talked was a little over $32.50 a barrel. The average price at the pump was $4.707. 

A barrel of oil was $128.

At the first of the year, the marking was $15.47 and the price at the pump was $3.376. A barrel of oil was $98.

Read an article on the interview with Mary on Page xx.

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Finally, some good news.

Dorothy is home.

Dorothy is Dorothy Cox, who’s our invaluable assistant editor.

Dorothy and other trucking industry media were at Walcott, Iowa, the first of June to judge the Shell Rotella SuperRigs competition.

During the awards presentation Saturday morning, a storm, including a possible tornado, was approaching the truck stop.

An announcement was made that it would be necessary to hurry up with the awards ceremony and head for cover.

Since they were getting ready to head to the airport for the trip home, Dorothy and some of her media friends were headed for the car when the high winds and heavy rains struck, turning Dorothy virtually sideways.

The other media members, including Eric Harley, co-host of the Midnight Trucking Radio Network, bailed out of the car to help Dorothy, finally pulling her to safety, but all were drenched.

Eric vowed to tell his listeners Sunday night something to the affect he was in a tornado with Dorothy and didn’t get carried away to the Land of Oz.