Joined: Jun 13, 2007 Posts: 3631 Location: Minniesotuh
Posted: Mon May 12, 2008 11:38 pm Post subject: High Fuel Costs Threaten Bankruptcy for Truckers
At $1,000 a fill-up, independent drivers suffer, and costs to consumers rise
By Marianne Lavelle Posted May 2, 2008
… With the cost of a fill-up for an 18-wheeler now well over $1,000, fuel surpasses labor as the biggest cost for some trucking firms. Big companies face falling profits. Small and independent truckers, some 20 percent of the industry, face devastation. Trucking firm failures jumped to "catastrophic levels" in the first quarter of the year, reports industry analyst Donald Broughton. He estimates that 42,000 trucks, or 2.1 percent of the nation's capacity, were idled in the first quarter—with nearly 1,000 companies going bankrupt. Broughton says the cash-flow crisis caused by unrelenting weekly diesel price increases has truckers looking to borrow money for basic operating expenses—license tags, insurance, and, of course, fuel. The credit-crunched bankers are cutting their losses and repossessing rigs.
In all, it is the worst crisis in the industry since the 2001 recession, but with an ominous twist. Thanks to the falling U.S. dollar, Russia and eastern Europe are eager to buy those idled trucks—eliminating the rigs from the U.S. marketplace for good. That may seem to matter little in the slowing U.S. economy, where there still are too many trucks chasing too few loads. …
The feedback loops are gonna be murder _________________ "RRrrruuuunnnn!!!" ~Apocalypto
Posted: Mon May 12, 2008 11:57 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
I'm not without sympathy for hard working people just trying to make a living
but....
There is NOTHING that can be done.
In a recession a certain % of businesses MUST go out of business.
Posted: Tue May 13, 2008 4:28 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
cube wrote:
yeah I know, I'll never make a good politician.
Dunno mate Tatcher made a career out of such attitudes, deliberately driving several industries to the wall and winning landslide elections for doing so.
Hatefull woman but brilliant politician who utterly changed the country for good and bad.
Anyway I am thinking out loud here but this whole hybrid technology, the sort of Prius and so on, am i correct in thinking that this is scaleable to truck size? Pitty there does not seem to be anything like that on the market as there perhaps is a chance for western economies to mitigate peak oil by flogging there out of date technology rigs to the East and using the money to help with the costs of buying newer tech rigs that would reduce the operating costs of US transport.
THIS I strongly feel is where not having peak oil as a major part of public discourse really hurts, here is where we could be managing a power down intelligently and perhaps even expanding the economy instead of naval gazing over the AWNR.
Posted: Tue May 13, 2008 7:23 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
Long haul trucking is dead. Hybrid technology is not going to change that. It can at best improve the mileage of the fleet, but it cannot change the economics where intermodal transport and rail favor long-distance transport.
Especially if you do believe that post peak oil decline will ensure that energy prices do not decline in a meaningful way over time. Just in time transport will have to be replaced by hub and spoke transport and local distribution except where population density is very low and does not justify the investment in fixed infrastructure. Even then such infrastructure as highways will by necessity have to be subsidized by denser areas if there is a greater public need.
Anecdotally, my cousins and their families are going out of beef production - or scaling back cow & calf numbers - due to the high cost of feed and energy as well as local meatpacking plants closing down. This leaves them at the mercy of long-haul trucking and shipping beef on the hoof as opposed of the more economical shipping of frozen beef (or at least cut and wrapped beef). That points to higher meat prices in the future, but not of much help to livestock producers today.
I am not sure how many cattle you can put into a semi, but if it costs $1200 to fuel up then it costs a lot per animal to transport live animals. Plus I saw that US packers (Iowa) are cracking down on illegal immigrants in their packing plants, so that will further drive up costs and drive down margins.
That may eventually even out, but in the meantime there will be serious swings in output as well as price volatility. Then no one can plan properly. Not least of all those long haul truckers who are making loan payments and paying more for fuel, insurance, etc. Perhaps Drew or someone else can shed some more light on this issue? _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Tue May 13, 2008 7:28 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
dorlomin wrote:
Anyway I am thinking out loud here but this whole hybrid technology, the sort of Prius and so on, am i correct in thinking that this is scaleable to truck size?
Yes and no. It's already being done for some sizes of trucks. Remember though that regenerative braking is only valuable if you do a lot of braking. That's why hybrids get such good mileage in the city. On the highway, the dual drive train isn't valuable at all. The Prius gets good mileage on the highway because of its aerodynamics, not because of the extra weight of the electric drive that isn't doing anything.
So, yes, hybrid delivery trucks and garbage trucks are being developed, but no, it wouldn't be of any value for long-haul trucking. The solution to fuel costs for over the highway trucking is rail.
Posted: Tue May 13, 2008 8:15 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
Perhaps you cousins should learn how to butcher themselves (likely they know some of it already), and prepare to service the local community. The necessity of localization is going to become more apparent and hopefully some farmers will be prepared for it.
Thus, cattle farms should shape their herds to respond to local demand, which means being ready to knock down a single animal a day, rather than shipping out many at once.
It means dairy farmers with the capacity to pasteurize their own milk and make butter and cheese.
None of this is particularly complicate and the mountains of product regulation that prevents much of it will fall by the wayside, out of necessity.
MrBill wrote:
Anecdotally, my cousins and their families are going out of beef production - or scaling back cow & calf numbers - due to the high cost of feed and energy as well as local meatpacking plants closing down. This leaves them at the mercy of long-haul trucking and shipping beef on the hoof as opposed of the more economical shipping of frozen beef (or at least cut and wrapped beef). That points to higher meat prices in the future, but not of much help to livestock producers today.
_________________ Gravity is not a force, it is a boundary layer.
Everything is coincident.
Love: the state of suspended anticipation.
To get any appreciable distance from the Earth in
a sensible amount of time, you must lie.
Posted: Tue May 13, 2008 8:40 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
dorlomin wrote:
...
Anyway I am thinking out loud here but this whole hybrid technology, the sort of Prius and so on, am i correct in thinking that this is scaleable to truck size?
...
Hybrid technology has been used way back in WW1 in diesel electric submarines so there's nothing new about it. The electric part allowed submarines to go underwater and thus revolutionized naval warfare.
getting back on dry land and the 21st century....
I once took an auto shop class and what most people don't know is that there's this concept called "stoichiometric ratio". That's the perfect air : fuel ratio of 14.7 to 1 where an engine is most efficient. It's very difficult to attain this ratio with a regular car. But a hybrid can have it's engine separate from the drive wheels thus it's not subjected to massive fluctuations in RPM and engine load. The engine in a hybrid can accelerate and decelerate very slowly thus making it easier to attain the stoichiometric ratio. The battery helps to smooth out the varying demands of power.
If 2 vehicles 1 hybrid and 1 regular are traveling at a constant speed then the hybrid losses much of it's meaning. As mentioned before don't expect long haul trucks to go hybrid, it doesn't make sense.
I'm not a fan of hybrids however it will serve niche applications.
IMHO hybrids today are nothing more than over-sized expensive toys for yuppies.If people were *serious* about cutting back on gasoline usage they'd buy smaller cars.
Posted: Tue May 13, 2008 8:53 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
Oh, we have local butchers, just no meat packing plants left any more. And it is competition that makes a market. If there is no other outlet for production then local prices fall, while the costs of feed; fuel; machinery; and even land continue to rise.
These are not small farms. They are farm businesses and businesses run on cash flow. There may well be a need for localization, but it takes time to right-size your herd and shrink your production costs as well as bank loans to meet it. In the short-term they are far more likely to switch to grain production and reduce the size of their cow and calf operations.
We went to all hay a number of years ago for many of the same reasons. Input costs were too high to justify the outlays in terms of machinery and other inputs, while land was too expensive relative to output.
That may change over time, but right now producers are getting squeezed even though headline agriculture prices have consumers screaming about being gouged. It just ain't so. The hog and chicken producers with higher fixed costs are even worse off at the moment than cattle farmers with land. In 18-months it might look completely different as meat prices adjust for those higher input costs, but for now it is not all happy days down on the farm. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Apr 07, 2005 Posts: 225 Location: West of Chicago
Posted: Tue May 13, 2008 10:44 am Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
If there remains demand for truckable products and fuel costs are driving truckers out of business, it means we have an extra capacity of truckers and the markets are correcting themselves.
As soon as the remainder push back on fuel surcharges (because they can) the markets will pass the fuel costs in their entireties to us, the consumer.
Joined: Mar 07, 2007 Posts: 358 Location: Holland, United Kingdom (of the seven Netherlands)
Posted: Tue May 13, 2008 12:46 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
dorlomin wrote:
Anyway I am thinking out loud here but this whole hybrid technology, the sort of Prius and so on, am i correct in thinking that this is scaleable to truck size?
Scaling of hybrid electric technology is not very good. For twice the weight in vehicle you need twice the size in battery pack. Those batteries are pretty expensive.
There are companies working on an alternative technology that is called hydraulic hybrid technology. This technology is especially efficient if you have a system that makes a lot of starts and stops like a garbage truck. Then the garbage truck has another advantage that it would need a hydraulic pump any way.
Posted: Tue May 13, 2008 3:48 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
canis_lupus wrote:
If there remains demand for truckable products and fuel costs are driving truckers out of business, it means we have an extra capacity of truckers and the markets are correcting themselves.
....
agreed
*looking a this from a political angle*
I do not think the trucking industry will get much if any financial support from the government. Politically speaking society has very little sympathy for truck drivers. Now if a bunch of teachers protested their economic plight then yes society will listen --> truck drivers NO.
I have this theory that if you asked Joe Sixpack: "How would you feel if 5% of all truck drivers went out of business?" Most people would probably say that's a good thing.....there will be less traffic on the freeways!
Posted: Tue May 13, 2008 4:16 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
cube wrote:
canis_lupus wrote:
If there remains demand for truckable products and fuel costs are driving truckers out of business, it means we have an extra capacity of truckers and the markets are correcting themselves.
....
agreed
*looking a this from a political angle*
I do not think the trucking industry will get much if any financial support from the government. Politically speaking society has very little sympathy for truck drivers. Now if a bunch of teachers protested their economic plight then yes society will listen --> truck drivers NO.
I have this theory that if you asked Joe Sixpack: "How would you feel if 5% of all truck drivers went out of business?" Most people would probably say that's a good thing.....there will be less traffic on the freeways!
this might be a regional thing. Around here there are a lot of truck drivers so there are a lot more people related to truck drivers. it is not so much a theoretical loss as a personal one. Do you want uncle Sven to loose his job or have to take a pay cut (because now there are too many truck drivers)?
No, I don't. _________________ "Mit der Dummheit kaempfen Goetter selbst vergebens" -Friedrich von Schiller
Posted: Tue May 13, 2008 4:49 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
cube wrote:
I once took an auto shop class and what most people don't know is that there's this concept called "stoichiometric ratio". That's the perfect air : fuel ratio of 14.7 to 1 where an engine is most efficient. It's very difficult to attain this ratio with a regular car.
Except for everything built with an oxygen sensor, which is probably everything built within the last two or three decades. Not to say that carb'd vehicles can't do fairly well, just that a carburettor can't keep up w/ the precision of a carb+o2 sensor and/or FI+o2 sensor. That being said, stoich tends not to be where peak efficiency is seen, which tends to be around 16-20:1 A:F ratio for SI engines, depending on the engine. Otoh, it is the best compromise between fuel efficiency and emissions, which is why most cars run at 14.7:1 most of the time, less open loop of course. Hybrids are more efficient not because of A:F ratio, but because of load maximization which the storage capacity a battery pack provides for the most part (less the Insight w/ lean burn). Even with the horrible efficiency of NiMH batteries, and the inverter/motor, at around 50-55%, it's still more efficient than having the engine operate at proportionally low load. _________________
Posted: Tue May 13, 2008 5:10 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
cannot long haul trucking be replaced by train transport. If there was some push to convert the trains to electric could that not largely solve some problems (obviously not all).? Trucks could still be used for short distance transport of goods but no reason why they couldn't eventually go electric?
Posted: Tue May 13, 2008 5:21 pm Post subject: Re: High Fuel Costs Threaten Bankruptcy for Truckers
rockdoc123 wrote:
cannot long haul trucking be replaced by train transport. If there was some push to convert the trains to electric could that not largely solve some problems (obviously not all).? Trucks could still be used for short distance transport of goods but no reason why they couldn't eventually go electric?
IIRC, just switching to rail, even if it is diesel electric, would only require about a fifth of what trucks do. Although, if we ended up expanding electric rail, which I doubt we will unless we change the way rail is taxed, to move everything we have from semis to electric rail would only require a percent or so of current electricity production. I'm pretty sure we scrounge that up if need be. _________________
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Not to say that carb'd vehicles can't do fairly well, just that a carburettor can't keep up w/ the precision of a carb+o2 sensor and/or FI+o2 sensor. That being said, stoich tends not to be where peak efficiency is seen, which tends to be around 16-20:1 A:F ratio for SI engines, depending on the engine. Otoh, it is the best compromise between fuel efficiency and emissions, which is why most cars run at 14.7:1 most of the time, less open loop of course. Hybrids are more efficient not because of A:F ratio, but because of load maximization which the storage capacity a battery pack provides for the most part (less the Insight w/ lean burn). Even with the horrible efficiency of NiMH batteries, and the inverter/motor, at around 50-55%, it's still more efficient than having the engine operate at proportionally low load.
