Sign of the Times - Trucker Protest Price of Fuel

From NPR: Dan Little, owner of a small trucking company in Carrollton, Mo., says diesel's climb to more than $4 per gallon has wiped out his profits. He and others in the long-haul community want someone in Washington to address their concerns.

From Logistics Management:

Trucking news: Talk of an April 1 trucking shutdown gains momentum

Jeff Berman, Senior Editor -- Logistics Management, 3/27/2008

WALTHAM, Mass—Speculation about a possible trucking shutdown on April 1 has been gaining momentum recently, according to media reports and Internet discussion boards.
The shutdown, which would be conducted primarily by owner-operators, is in response to the current run-up for diesel gasoline prices. Nationwide, diesel is currently averaging $3.989 per gallon and has gone up 70.9 cents in the last five weeks—all of which have been record-breaking—according to the Energy Information Association, a unit of Department of Energy. And in some parts of the U.S. diesel is already exceeding the $4 per gallon mark.
What’s more, the American Trucking Associations (ATA) called on the White House earlier this week to release oil from the Strategic Petroleum Reserve (SPR) to curtail this ongoing historical run-up in crude oil prices, which continue to hinder myriad segments of the U.S. economy and freight transportation—especially trucking—in general. And last week the ATA projected a record-high diesel bill for 2008, noting that that trucking industry is on pace to spend $135 billion on fuel in 2008—based on current price forecasts. This estimate, said the ATA, would be a $22 billion increase over the trucking industry’s $112.6 billion 2007 fuel tab.
Even though the media and Internet reports on this potential strike indicate that the reason behind it stems from truckers being fed up with current diesel prices, some people feel this strike is not a good idea and would send the wrong message.
“I don’t think it would be a very good thing for our country at all,” Department of Transportation Secretary Mary E. Peters told CBS 4 in Denver. “And if the strike is because of high oil prices, I think that would be taking an action that would affect American businesses and American consumers for something they don’t have a direct relationship to.”
Despite Peter’s sentiment, it appears that it may be falling on deaf ears when it comes to owner-operators. On a trucking Website entitled “Trucker to-Trucker,” Dan Little, owner of Little and Little Trucking LLC, who goes by the handle of Trucker Dan, is calling for truckers to shut down for one day, beginning at 8 a.m. on April 1.
He added that from that time striking truckers will not accept any loads at any price until the Federal Government admits and puts into action a plan that will give all owner-operators some help. He said this government help should come in various forms, including: suspending all federal and state fuel taxes until the economy recovers; having the federal government create an oversight committee to oversee insurance premiums charged for Class 8 truck insurance; and to stop allowing large trucking fleets to self-insure, which would create a more level playing field for all trucking companies, among others.
Another trucker on the same site said that “the price of fuel has increased exponentially over the last several months and oil companies, transportation companies, brokers and others all seem to be recouping their costs plus profit while the trucker continues to be squeezed from all sides as a producer delivering the goods and as a consumer attempting to support a family. The profit pie does not seem like it is being divided fairly.” He added that freight brokers never reveal their individual truckload profits, but few are going out of business, while many independent truckers and small companies are struggling to meet ends meet.
If this shutdown were to go on for any longer than one day, it may have a very negative trickle-down effect on shippers’ supply chain operations and processes.
“This is not a minor deal,” said David Schneider, Logistics Management Contributor and President of supply chain and transportation consultancy David K. Schneider & Company LLC. “When you consider any of the major truckload guys, 10-to-15 percent of them and maybe more use owner-operators. And then you have smaller 3PLs and brokerage operations that have contracted to provide services for bigger players, and almost half of their stable is going to be owner-operators.”
While it asked the White House to tap the Strategic Petroleum Reserve, the American Trucking Associations is not supporting the strike.
“We would not participate in or condone any strike,” said Clayton Boyce, ATA vice president of public affairs and press secretary. “It is hurting the wrong people and would not accomplish what they want to accomplish. We are taking a different tact in fighting the high price of diesel.”
While talk of the shutdown continues to gain momentum, it is not clear how many owner-operators will actually be participating, according to Norita Taylor, a spokesperson for the Owner-Operator Independent Drivers Association (OOIDA). Taylor told LM that percentages of those [OOIDA member drivers] participating or parking is not something that can be pinpointed since many members have indicated they do not intend to participate, adding that the OOIDA has no confirmed number of participants.
“What we’d like to see happen is for Congress to enact legislation mandating 100 percent pass through of fuel surcharges and transparency in those transactions,” said Taylor. “When prices on the stores shelves go up, it is not because of truckers. They are often not seeing these rises trickle down to them because of brokers or middlemen.”
While the owner-operators may be taking a stand with this shutdown, Eric Starks, president of FTR Associates, a transportation research firm, says its overall impact may be minimal.
Starks said it likely will be broad-based, noting that it may be comprised more of isolated incidents in certain pockets of the country, where owner-operators feel more compelled to do it.
“I have a hard time believing it will be widespread and spread beyond the owner-operators and even then it would be difficult for most of them due to the current situation…because most of them can’t afford to not drive and lose money.”

My Take: This protest is by independent trucker owner-operators and is scheduled for April 1st.

I read about this awhile ago, but I didn't believe the probability of owner-operators organizing a strike would be large enough for the general media to pick up on it. Due to their size and number, owner-operators don't have much bargaining power when negotiating contracts and price is really one of the few ways owner-operators can compete. And when you compete based solely on price, you can expect to get squeezed when times get tough.

Will keep you posted as this event unfolds on April 1st.