Trucking industry hit with higher fuel costs

A trucking industry spokesman said the higher price of diesel — up to 60 cents more per gallon — will increase the cost of shipping goods, and that price hike will likely be passed along to retailers and consumers.

“I think it’s safe to assume there will be some ripple effect,” said Bob Costello, chief economist for the American Trucking Associations.

There were periodic shortages of diesel this week in markets that rely on Gulf Coast refineries and pipelines, including Nashville and Atlanta.

Alan Sobel, vice president of fuel for Chattanooga-based US Xpress Enterprises Inc., a 5,500-truck transport company, said there were no reports of drivers getting stranded because fuel vendors were keeping them posted about shortages.

But when fuel costs jump so quickly it is “very hard to recapture that money,” Sobel said.

Major trucking companies typically have fuel surcharges to pass along some of the higher fuel costs, but independent owner-operators suffer the pinch of such increases themselves.

“It is killing them,” said Tommy Newman, a petroleum specialist for Dalton, Ga.-based FAST Petroleum, Newman said the diesel price jumped about 60 cents per gallon after Katrina.

Trucker Alvin Kennedy of Milton, Fla., paid $2.90 per gallon, a total of $146, to fill his tank Friday in Wildwood, Ga. He said the increased cost was coming straight out of his pocket.

“The freight doesn’t pay any more than it was before,” Kennedy said.

ABF Freight System Inc. in Fort Smith, Ark., said it was adding a fuel surcharge to offset higher diesel prices. ABF operates its own fueling terminals for up to 80 percent of its line, so spot shortages were not a significant issue for the company, spokesman David Humphrey said.

Lisa Mullings, president of NATSO, formerly the National Association of Truck Stop Operators, said there were some spot outages Friday, but capacity was improving because of the recovery of the Colonial and Plantation pipelines, which carry gasoline and diesel from the Gulf to East Coast markets.

“I think that (outage) is going to be less of a concern,” she said.

Mullings said TravelCenters of America, Petro and some other major truck stop operators among the association’s 900 members were keeping their Web sites updated about supplies of fuel.

The federal government also acted Friday to expand the nationwide supply of diesel fuel. It will allow diesel fuel intended for farm equipment and government vehicles to be used by commercial trucks and other vehicles without a special tax.

Tom Nightingale, a spokesman for Schneider National in Green Bay, Wis., said none of its 12,000 trucks ran out fuel or experienced shortages. “We do not anticipate any disruptions in service,” he said.

But he noted that higher diesel prices were having a “dramatic impact.”

“For every 5 cents at the pump that fuel goes up, there is a 1 cent per mile fuel surcharge increase,” he said.

Palo Alto, Calif.-based CNF Inc., with about 8,000 trucks, had some difficulty getting fuel at some locations in the South, spokesman Jim Allen said.

But Atlanta-based package delivery company UPS Inc. said its operations were not affected by gas shortages or prices.

“We are monitoring the situation very closely, but at the moment there has not been any impact on UPS operations involving fuel,” spokesman Norman Black said.

Black said prices to customers should not be affected by the shortage, at least in the short term. UPS already requires a fuel surcharge on deliveries — but that rate is set on a monthly basis based on government indexes, Black said.

“The broader concern we have is the price increases and whether they’ll have an impact on the overall economy,” Black said. “Our business in the United States is strongly linked to the U.S. economy. That’s really our main concern at this point.”