Trucking companies face dilemma as costs rise
Last Updated: Friday, May 9, 2008 | 10:34 AM AT
CBC News
The owner of a trucking company in Nova Scotia's Annapolis Valley says the industry is facing a double whammy of skyrocketing fuel costs and less freight to move.
Paul Easson, with Easson Transport, said some drivers are even parking their tractor-trailers as customers demand discounts.
"If you do negotiate away the fuel surcharge or a portion of that surcharge, I think it's like signing your death warrant. If they don't get the fuel surcharge from that customer, eventually the trucking company will be out of business," Easson said.
As fuel prices rise, trucking companies are passing some of the extra costs on to their customers, similar to initiatives in the airline industry. These same companies, however, are feeling the pressure to cut the bill to avoid losing a cargo or a customer to a competing firm, Easson said.
The hauling fee on a trailer load of vegetables can cost a grocery store $1,000. That store can be billed an extra $400 to cover higher diesel prices.
Easson said his customers plead for discounts, but he can't run his 150 trucks without that money. He said a smaller firm in New Brunswick has already parked its trucks after explaining the choice to its main customer.
"They said I'm going to withdraw service for three weeks while you think about whether to pay the fuel surcharge or not, and if you pay I'll open up, and if you don't I'll stay closed," he said.
That uncertainty has prompted fuel suppliers to demand payment after 15 days instead of 30. Many owners like Easson are now asking the banks for a higher line of credit.
"There's more to the industry problems than just fuel. There's generally a reduced volume of freight, like newsprint and plants around Atlantic Canada have closed," Easson said.
Exports of seafood and some manufactured items are also down, leaving truckers increasing worried about their future.
