You are a member of the club!

If you have to transport anything by truck, plane, ship, bus or any other method that uses a gas or diesel powered engine, you are in a very large club. Unfortunately this club has some growing problems. Many of us have tried to convince ourselves that the problems are not ours, or that given time, they will go away. Time has run out!
I do not have the room to cover every problem we are facing but we should consider the big two, fuel costs and driver retention.

We have talked about the fuel surcharge in the past. We discussed how it is set and why it changes. By now, most of us understand the reasons for the surcharges and most importantly that we are all having to deal with the pain of these costs. Seventy percent of U.S. freight travels by truck and both the service provider and the consumer are getting hit by the sharp rise in the cost of crude oil. I’ve been told that 70% percent of the cost of diesel fuel comes from the cost of crude oil. The weakened dollar does not help with the cost of crude on the world market. Our economy may be slow, but countries like China have growing economies and this hurts the U.S. when it comes to our cost of crude.

Another major problem we are facing is the issue of driver retention. The entire industry is experiencing a shortage of qualified van operators. This demand has created a “churning” of drivers with many companies. This job-hopping creates a few problems. First, it creates added expenses due to recruitment and training of van operators, and it creates van availability issues for customers. The U.S. Dept. Of Transportation has also linked the job change rate to safety. Their research indicates that there is a relationship between the van operator change rate and crash involvement. The studies are not finished yet, but this information alone would indicate that greater scrutiny needs to be given during the hiring process. This is not just an issue of cost, but of public and cargo safety.



Links to current fuel cost information:
Diesel & Gasoline Comparison Prices (including a breakdown of derived costs)http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp
Diesel Prices Throughout the United Stateshttp://tonto.eia.doe.gov/oog/info/wohdp/diesel.asp