I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: May 18, 2006 Posts: 4753 Location: Minneapolis, MN
Posted: Mon Mar 03, 2008 11:38 am Post subject: Trucking
Just got off the phone with a trucking broker I know. These guy's haul Jeno stuff from Cali. He figures fuel will hit $8 gal soon and figures he MAY be out of business soon (like within one year). He said a couple of guy's couldn't afford current license tabs ($2,000) so he had to buy em for their riggs. They are freaking out as almost everyday they see fuel costs increase. Business for them looks bleak.
Last edited by vision-master on Mon Mar 03, 2008 12:21 pm; edited 1 time in total
Posted: Mon Mar 03, 2008 12:01 pm Post subject: Re: Trucking
vision-master wrote:
Just got off the phone with a trucking broker I know. His guy's haul Jeno stuff from Cali. He figures fuel will hit $8 gal soon and figures he MAY be out of business soon (like within one year). He said a couple of guy's couldn't afford current license tabs ($2,000) so he had to buy em for their riggs. They are freaking out as almost everyday they see fuel costs increase. Business for them looks bleak.
Never understand this bitching, if the costs for everybody increases you pass it on to your customer, what's the big deal? I would understand if let's say gas costs $10/gal in Calif and $2 in NY. And the Calif trucker complain about unfair competition, but that's not the case, everybody is in the same boat. (Or do they face competion from cheap chineese trucking companies?)
Joined: Jan 03, 2005 Posts: 1207 Location: western Wisconsin
Posted: Mon Mar 03, 2008 12:03 pm Post subject: Re: Trucking
One thing I don't understand about truckers and their contracts is that they have been concerned about fuel prices since the 1973 "oil crisis". I remember hearing truckers interviewed on the radio/TV back then about how they wouldn't/couldn't stay in business due to fuel prices. Haven't they been able to update their contracts since then? Wouldn't it make sense to have fuel price increases figured into their contracts? Other businesses have learned to do this. Is there something here that I am not catching on to?
Posted: Mon Mar 03, 2008 12:50 pm Post subject: Re: Trucking
WisJim wrote:
One thing I don't understand about truckers and their contracts is that they have been concerned about fuel prices since the 1973 "oil crisis". I remember hearing truckers interviewed on the radio/TV back then about how they wouldn't/couldn't stay in business due to fuel prices. Haven't they been able to update their contracts since then? Wouldn't it make sense to have fuel price increases figured into their contracts? Other businesses have learned to do this. Is there something here that I am not catching on to?
I would say right now it has to do with the fact that because of a slowdown, they (independent drivers) all are competing for a smaller piece of the pie. Thus they can't raise their prices. However, others will and pass it along to the consumer. Hello massive inflation. Man are we screwed.
Joined: May 02, 2005 Posts: 3528 Location: Oh really?
Posted: Mon Mar 03, 2008 1:05 pm Post subject: Re: Trucking
bigfnman wrote:
...
I would say right now it has to do with the fact that because of a slowdown, they (independent drivers) all are competing for a smaller piece of the pie..
Yep. It's the "last man standing" syndrome once again. In a competitive environment where too many players are chasing too few orders, there are always a few that are willing to operate at a loss in order to win a rather hollow victory. _________________ "It's still all about energy!"
Posted: Mon Mar 03, 2008 1:13 pm Post subject: Re: Trucking
Someone more authoritative on this may wish to comment. I believe that there were some truckers viewing this forum at one point who had some opinions on this issue.
Truckers fall into three main categories: independent truckers, who are small businesspeople that own or lease their own equipment, and haul whatever loads they can, "company owned" truckers, that work for a company that does something else, and use their own trucks for transportation, and "fleets" which are the big fleets like JB Hunt and YRC who are in this cutthroat business for real.
The independents are clearly screwed for the time being. They have to go into the marketplace and compete for freight with the big guys, buy their fuel at retail, and work like mad to get backhauls to make their trip in the reverse direction. The big fleets, and we all know who they are, have more pricing power in the marketplace, and also are giant enough that they can "hedge" on fuel costs (buy wholesale, buy futures and options to offset the price) and also, most importantly can, and do, charge their customers a fuel surcharge to pass costs on to deliver the goods. In the middle somewhere are the companies that own their own truck fleet, and the calculation on whether to do this or whether to just let a common carrier do it is affected by their ability to pass transportation costs on to their customers.
So for the time being, the winners will be the bigger and more efficient truck lines that can optimize their back-haul shipping and get discounted fuel.
At some point, though, the worm may turn, particularly if these big guys start to give bad service because of their size. The independents might be able to get into some niches where the common carriers will not give the good service and/or are at a time disadvantage, example: certain local deliveries that the CC's do not mess with.
The limiting factor for the big guy could be the risk that they could lease a lot of trucks and then have the economy go down the toilet, in which case they are paying out a lot of money to have trucks sitting around doing nothing. The small scale guy would feel this too, if he went out and borrowed money to buy his truck.
Posted: Mon Mar 03, 2008 1:16 pm Post subject: Re: Trucking
I don't know how it works in other parts of the country but here on the gulf coat oil field trucking it is something like this.
You're an independent trucker with your own rig. If you don't have alot of customers, you lease your rig to a trucking company. Down here we have Ace,Venture, and Sam Broussard Trucking to name a few.If I need a truck I will call the terminal and the terminal will call one of the independents to make my haul. The trucker gets a percentage of the total cost of the load. I think it's like 25% when I call the terminal. If I call the terminal and ask for a specific trucker their percentage goes up. If I call the trucker direct and don't go through the terminal, he still has to pay a percentage of the load to the terminal.
Most of the truckers that I talk to tell me the price of diesel is killing them. If I need to run a truck to port Fourchon which is about 3 to 4 hours away from here if they don't catch a backhaul coming back this way they say they are doing just a little better than breaking even on the run.
Also every trucker I talk to tells me it's really slow right now, since the begining of the year. Last year averaging 3 to 5 runs a week down to 1 to 2 runs a week. A few have said if March is anything like the last couple of months they would have to get out of the business. _________________ Nothing is more dangerous than a man with nothing left to lose but has everything left to gain.
Posted: Mon Mar 03, 2008 2:01 pm Post subject: Re: Trucking
HEADER_RACK wrote:
oil field trucking
I work in the oil and gas industry and right now there is a huge demand for oilfield truckers hauling oil field equipment, crude oil, and other products. Many parts of California, Utah, and SE New Mexico (that I am personally familiar with) their production is dependent on the trucking capacity. Many areas do not have pipelines on location and the crude has to be trucked. It is not unsual for production to be shut-in for several days because tanks are full and trucks are limited.
As always with high demand their is also high compensation for those truckers. The competition is cutthroat and the truckers receive the benefit. Nobody wants $103 bbl oil sitting in a tank.
Posted: Mon Mar 03, 2008 2:21 pm Post subject: Re: Trucking
I just had a friend come back from NM from doing a frac job there. I agree those areas from what I'm hearing seem to be doing well. Unforunately it's not the same here on the gulf coast. I talk to every truck that rolls through my shop to see whats going on in other areas and they all say it's unusualy slow. _________________ Nothing is more dangerous than a man with nothing left to lose but has everything left to gain.
Joined: Apr 07, 2005 Posts: 225 Location: West of Chicago
Posted: Mon Mar 03, 2008 2:31 pm Post subject: Re: Trucking
Weird. Here in Chicago a buddy of mine runs a small terminal. They have seven trucks and all are always out. They are going to be adding a truck a month until the end of the year.
Posted: Mon Mar 03, 2008 2:53 pm Post subject: Re: Trucking
HEADER_RACK wrote:
I just had a friend come back from NM from doing a frac job there. I agree those areas from what I'm hearing seem to be doing well. Unforunately it's not the same here on the gulf coast. I talk to every truck that rolls through my shop to see whats going on in other areas and they all say it's unusualy slow.
Thats where flexibility comes into play but sometimes people aren't willing or cannot be flexible.
Several years ago we had a similiar scenario where local welders did not have enough work but Alaska and Canada where in desperate search for oilfield welders. Those that were able to move for 6-12 months made a ton of money in a short amount of time working in those areas but if you have a family back home it wasn't too easy to pack up for 6 months and then move back.
Posted: Mon Mar 03, 2008 9:14 pm Post subject: Re: Trucking
Quote:
Or do they face competion from cheap chineese trucking companies?
Depends on what routes the truckers are operating. Many truckers are facing stiff competition from railroads which face a far smaller fuel bill as a percentage of costs. This is why railroad ton-miles have increased 12% every year since the oil crunch began. Many railroads are investing billions of dollars to expand their own capacity and reach new markets in an effort to put even more truckers in the pinch.
This is where routes come in. Some regions do not have efficient rail service, or the rail simply does not go where the goods need to, so truckers operating in that market should be booming about now as the heavy industries such as mining and agriculture continue their boom.
Posted: Tue Mar 04, 2008 1:17 am Post subject: Re: Trucking
The only trucks I've seen driving efficiently are those that shuttle between the stores/warehouses, everyone else blasts by at least 5-10mph over the limit. The guys going 75mph could likely see a 2mpg improvement just by dropping to 55-60mph. From Cummins[1]
Quote:
The most efficient drivers get about 30% better fuel economy than the least efficient drivers.
Quote:
Above 55 mph, each 1 mph increase in vehicle speed decreases fuel economy by 0.1 MPG.
Trucks, like most vehicles on the road, can do a lot to reduce aero drag[2].
Quote:
The combined effect of all aerodynamic improvements on one vehicle could result in as great as 23% reduction in aerodynamic drag. For every 2% reduction in aerodynamic drag, there is a 1% improvement in fuel efficiency.
Posted: Tue Mar 04, 2008 5:00 pm Post subject: Re: Trucking
yesplease wrote:
The only trucks I've seen driving efficiently are those that shuttle between the stores/warehouses, everyone else blasts by at least 5-10mph over the limit. The guys going 75mph could likely see a 2mpg improvement just by dropping to 55-60mph.
Yes, you are quite right!
The major problem to this though is traffic and the rearend gearing of the tractor.
When all the bad drivers in the slow lane are constantly speeding up and then slowing down a truck can't maintain a steady speed. This completely kills any gains made by slowing down. Think about it; you drop from 60 mph to 40 and then have to speed up. You've dropped down two gears at least and now have to use full throttle for 20 or 30 seconds, maybe even a minute, to get back up to speed, and are burning fuel at about 30 or 40 gallons per hour instead of 9 or 10 gph.
This slowing down and speeding back up happens about ten times a minute in the slow lane.
The motoring public not maintaining a constant speed when there is no reason not to is my biggest aggravation as a driver.
As for gearing the unit must be spec'd with the right ratios to obtain maximum mileage at 55 or 60. Many trucks are geared a little high for this speed and will be on the lower end of the sweet spot for economy engine RPM wise.
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