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Gas Prices 'Tremendous' Impact on Local Truckers

By Michelle Cyr-Whiting

Tuesday, November 30, 1999 12:00 AM

The President of the Prince George Trucking Association says the recent hike at the gas pumps translates into an approximate $500 increase in monthly fuel costs for most truckers.

Stan Wheeldon says it’s difficult to plan for such dramatic upswings because it’s often a year or more between adjustments for hourly truck rates.  "A lot of the time, you eat it (the gas hike) because the hourly rate adjustment that you might be able to go up for doesn’t cover what that fuel does."

The City’s Manager of Supply and Fleet Services, Scott Bone, says the City is involved in a bulk fuel buying group, which prevents its fuel costs from being impacted by spikes at the pump.  Wheeldon says the local trucking industry has the volumes to contemplate something similar, but says, so far, local truckers haven’t been able to band together.

Wheeldon says, "’Getting together’ is what has to be done and we have a lot together, but we’re not as much together as we need to be to realize the maximum benefit."

Asked whether the rising prices could make the difference for a truck driver contemplating a career change, Wheeldon says, "I don’t think by itself it would be a reason, but it just adds to it."  He says, "If you’ve got 8 items on the plate that are really giving you trouble and if 10 is where you think you might get out, it could make it that way."

"Be we have to, by the same breath, try to be as innovative as we can and buy the newer, more efficient engines and power trains and gear rations and things like that to make that cost stay as low as you can make it - but it just adds to your challenges.


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Comments

So why has no one negotiated a monthly adjusted surcharge based on fuel costs? Why should the truckers take the risk? This has been happening for some years, so one would think any reasonable people could have worked out a more equitable system.
And what happens next!...all our food and stuff we need to live on goes up in price!

(Oil prices effect a lot of things)
Wait till they start using wheat and corn for ethanol and wood for the same stuff plus 500% increase in pellets ....

your bread will go up in price and your wood constrcution will go up in price ...

it is all about energy and supply and demand ...

on top of that we must not forget that there is heavy investment required to access ever increasing costs of the technology required to do so.
There are many others that have jobs that involve being on the road. I am one of them and work partly on commission. My pay does not increase as fuel does - I simply accept it as part of my job. There is no relief for me whatsoever - truckers know this is an expense that is variable. I think the route of the problem is government taxation and the monopoly of the oil companies - solve that problem and the working person will be happy.
Truckers have been getting jacked around on fuel for years. It is not a new game. They continue to complain about it, but they continue to work for substandard rates.

At least they are getting compensated for fuel. The rest of us that drive to work or for work, don't make any more money when the fuel goes up. We can't afford to run boats or sleds and things like that.
I think the idea of getting together to simply formulate some kind of hedge is behind the times. The market is much too volatile to make that a realistic approach. Getting together to implement some kind of pricing pressure might have some small token kind of effect?

On the other hand a surcharge is directly correlated to the variable cost item with the ability to be triggered by benchmarks. The problem is often the surcharge is charged by the shipper, but the surcharge is not passed on to the lease operators driving the trucks.

Some have called for laws that state any surcharges be itemized on the invoices and be passed on to the person who bought the fuel.

Some lease operators buy their own fuel, and other have their fuel paid directly by the shipper.

One suggestion has been to have a legislated minimum surcharge when fuel prices reach certain benchmarks. Some argue this could void their current surcharge policies if they are more generous then the minimum. If we have a minimum wage concept in society then it only seems fair IMO to index the fuel component in some way for the transportation industry as a minimum standard, but not overriding more generous incentive programs. If we wish to have save highways we can not ask for increased external (related to foreign policy) operating costs to be subsidized from the maintenance budget of the lease operator.

Some can make the surcharge work to their advantage if they play with the numbers and can get away with it.
For an example we can look at a rate of $100 per hour based on 90cents per liter for fuel. Fuel hypothetically works out to $45 per hour or 45% of the hourly rate. If the price of fuel goes up to a $1 dollar per liter for an 11.1% increase in the price of fuel, than the company will charge a surcharge percentage equivalent to its hourly rate bringing it to $111 dollars per hour even though fuel costs only went up from $45 dollars to $50 dollars with that 11.1% raise in the cost of fuel. Therefore with an increase in $5 dollars to the cost of fuel the company is able to charge an $11 dollar surcharge and increase net income by $6 dollars for a 40% increase (hypothetical operator cost $40 per hour, thus net income goes from $15 to $21 dollars per hour).
Some can not charge a surplus or get taken for theirs and they go bankrupt.
All Trucking Companies in Canada, certainly the major ones, and most if not all of the local Companies have had a fuel surcharge in effect for the last 4 or 5 years, or more.

At present it is approx 24%. That is if the Freight charge is $1000.00 then the fuel surcharge is $240.00. Total cost to shipper is $1240.00 It is highly unlikely that their is a trucking company in British Columbia operating without a fuel surcharge.

The fuel surcharge rises and falls with the price of gas. It is usually shown as a **separte line item** on the invoice so that it can be tracked, and if prices ever fall, then of course it would be eliminated altogether.

Shippers pay for most of the increase in fuel costs from the trucking companies and of course eventually this cost is passed on to consumers. **Whats new**

Oil Companys are fully aware of who is paying the increased costs and couldnt care less.

As far as the general public is concerned they will pay whatever the price is at the pump, and then complain, but it is highly unlikely that they will ever do anything more than **bitch**. The oil Companies are aware of this too, and could care less.

Price of gas in Quesnel Sunday was 1.13 litre. Price George and Williams Lake was 1.17.

If all consumers of gas didnt fill their tanks, and bought as little gas as possible over a period of time, two things would happen.

(1) Weekly,Monthly revenue for the gas Companies would fall because less gas was being purchased.

(2) Gas would start to back up into the Storage Facilitys, and eventually would create a storage problem, which I beleive would force the Gas Company to reduce the price so they could move this inventory, otherwise it would back up to the well head.

By reducing the amount of gas you buy at one time, reduces revenue. Most people are to lazy to make two or three trips to the gas station for gas, so they will fill up, pay the high price and guess what? **Bitch**

Have a nice day.