Diesel Wallet

Diesel Wallet

Rising Diesel Prices

April 1, 2008 was the day when all the American truckers went on strike to fight against the rising price of diesel. The drivers say that they are not able to make enough profit from their business. The cost of a big rig can exceed $100,000, without the added expense of maintaining the vehicle. So the small trucking companies are shutting down, as they are not able to fight with today's higher operating costs.

In a report released by the Avondale Partners, LLC, it was said that the number of trucking companies have gone out of business in the first quarter of this year. This report stated that an estimated 42,000 trucks, which is 2.1 percent of this nation’s over-the-road heavy-duty trucks, went out of business during the first three months of 2008. Some trucking companies pay their drivers a fuel surcharge to help with the cost of fuel but the fuel surcharges paid are not enough to keep up with constantly increasing fuel costs. As of April 2008, 24.3 cents on the gallon are collected in federal fuel taxes on diesel. Some shippers are refusing to pay any fuel surcharge or, in the case of some brokers, collecting it but then failing to pass it on to the company.

Americans are dependent on these men and women of the highway for delivering everything from the food they eat, to the clothes they wear, to the toys for their children. The increasing cost of diesel will eventually affect the price of all merchandise sold in the American market place. The high diesel prices will not only drain a trucker's wallet at the pump but will raise the prices an average person pays at the supermarket and at all retail stores, businesses that will have to charge more to cover their costs and will pass the charges on to consumers in the form of higher prices on their products.

An article by CNN's Jack Cafferty says " food inflation in the U.S. is at its highest level in 17 years and could get worse. The rising cost of food is hurting many Americans especially the poor. It's also tough on businesses, like bakeries and delis that have to explain price increases to their customers. For many poor people, costlier food means having to give something else up in order to eat. Although the price jumps for various foods are due to many factors, including higher commodity costs for things like wheat, corn, soybeans and milk, one of the main reasons for the jump are higher energy and transportation costs."

The 2008 transit budget had planned for a 2.3-per-cent increase in ridership, but rising fuel costs for motorists (30 per cent since January) pushed ridership up by 5.3 per cent for the first five months of the year.

 

 

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