Monday, March 24, 2008

Fuel Prices

Diesel is moving halfway up to $5.00 per gallon. I do not see how an independent can make it unless he is clearly moving that increase on to the shipper. My guess is the independent has a hard time doing that.

I also guess there is quite a bit of competition for loads. Competition between independents. There are some just barely hanging on. The overhead will tell the tale. If the truck and trailer are paid for or nearly paid for, the trucker will be able to hang on for a while. He will be able to eat the increased fuel cost if he cannot pass them on. Gradually, even this operator will be squeezed from the market.

We will not see this. But what we will see is this: Older trucks pulling loads. Trucks that are paid for. In fact, in the West you can see this already. Rarely these days does a trucker see a new truck run by an independent.