TRUCKERS AGAINST

HIGH FUEL PRICES

Rising gasoline prices should make us all concerned about what the means for our economy. .

RISING GASOLINE PRICES

Gasoline, one of the main products refined from crude oil, accounts for just about 17 percent of the energy consumed in the United States. The prices paid by consumers at the pump reflect the cost to produce and deliver gasoline to consumers, as well as the profits and losses of crude oil to refiners, marketers, distributors, and retail station owners. Crude oil accounts for 55% of the price of gasoline, while distribution and taxes influence the remaining 45%.

As of late, the gas prices have been on a steady increase. By April 2008, the national average gallon of gas rose 15%, from $3.09 to $3.50. This was primarily driven by a 25% increase in crude oil prices. According to BBC, Oil Price May Hit $200 a Barrel, May 7, 2008, and other news sources, high oil prices are a result of surging demand from China and India, and a curtailment of oil supply from Nigeria and Iraq. Since oil is denominated in dollars, the 40% decline in the dollar in the last six years has also put upward pressure on oil prices.

Soaring diesel prices -- which nationally are averaging $4.69 a gallon compared with $2.79 last year (2007) -- and increased price competition among trucking companies are running thousands of the nation's 18-wheelers off the road. These days it costs upward of $1,100 to fill up a big rig with a pair of tanks that hold 250 gallons. That's up from about $700 last year.

TRUCKERS PROTESTING AROUND THE WORLD

Truckers have protested rising fuel prices at the U.S. Capitol and elsewhere. Truckers in the US are urging Congress to end large oil company subsidies and release fuel from the Strategic Petroleum Reserve, among other things.

In Madrid, Spain, tens of thousands of truckers in some member countries of the EU carried out protests Monday, June 9, 2008 against the rising fuel prices, triggering highway blocking. Spanish trucks jammed several main highways, including at the frontier with France, and caused tangle in the capital Madrid and Valencia, said a Spanish traffic official. Spain's second largest hauler's union, claiming to represent 70,000 out of Spain's 380,000 truck drivers, launched a massive open-ended strike. See http://english.people.com.cn/90001/90777/90853/6426441.html. Taxi drivers also held a protest against high fuel prices in downtown Madrid on Thursday. And, Spanish fishermen went on a week-long strike Friday, along with their counterparts in Italy and Portugal.

French truckers struggling with high fuel costs launched similar protests near the Spanish border and in the southwest. Some trucks disrupted traffic at border posts, stopping trucks from crossing, and triggering a tailback of some 10 km on both sides of the border. About 200 trucks gathered on the four main expressways leading into Bordeaux Monday morning, causing 30 km of tailbacks in and around the city. Among the truckers, some protesters waved banners which read: "Trucks Unemployed." Also on Monday, French fishermen from Mediterranean ports ended a three-week strike, protesting marine diesel prices hike.

In Portugal, the strikers blocked the entrances to some factories. Police said trucks, parked at petrol pumps or on roads, were stoned after the strike started. There are some 40,000 truckers serving an estimated 5,000 firms. "We are demanding immediate measures" to counter the impact of high fuel prices, said Jean-Pierre Morlin, president of the European trucking organization for the Aquitaine region. Portugal's Transportation and Communications Minister Mario Lino would meet with representatives of the road transport associations in a bid to end the stoppage.

In Brussels, Belgium, hundreds of farmers, truckers and taxi drivers blocked roads in and around Brussels on the eve of an EU summit to push leaders for help coping with skyrocketing fuel prices on June 18, 2008. Convoys of taxis farm tractors and truckers blocked parts of Brussels' inner ring road Wednesday, wreaking traffic havoc. Police said they expected some 1,000 protesting vehicles in central Brussels. Farmers were also handing out free vegetables and meat at a downtown square. The protesters - echoing recent demonstrations elsewhere in Europe and around the world - argue that the high fuel prices threaten their livelihoods. They are demanding that EU governments step in with subsidies to ease the sting of higher prices. See http://news.aol.com/story/_a/belgian-truckers-farmers-protest-high/n20080618094309990013?ecid=RSS0001

In Asia, South Korea and Thailand were taking a stance. South Korea's main truckers' union launched a strike on Friday, June 13th, to demand additional financial aid to help them cope with soaring diesel fuel prices, putting additional pressure on a government already beleaguered by public protests against U.S. beef imports. See http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/12/afx5112420.html

In Bangkok, Thailand, thousands of truckers went on a half-day strike in Thailand on Wednesday, June 11 demanding government help against rising fuel prices, the latest in a series of protests that have swept across Asia and Europe. See http://www.washingtonpost.com/wp-dyn/content/article/2008/06/10/AR2008061000548.html

EFFECTS OF HIGH FUEL PRICES
Although truckers can recoup much of the higher fuel costs through surcharges that are adjusted as diesel prices rise and fall, sharply rising prices can cause serious cash flow problems for some, said Donald Broughton, transportation industry analyst at the investment firm Avondale Partners.
Carriers typically aren't paid for their deliveries until well after they're made, leaving the trucking companies -- or individual owner-operators -- carrying hefty out-of-pocket expenses for six weeks or more, Broughton said.

During the first three months of this year, 935 trucking companies filed for bankruptcy, according to Avondale Partners research. That's the highest failure rate seen since the economic slump of the early 2000s, Broughton said. Broughton estimates that more than 42,000 long-haul trucks -- roughly 2 percent of the nation's fleet of about 2 million -- were idled during the quarter. See http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=0c97a7e8-2dc8-407d-9fd1-25998cfc76d9

SOLUTIONS: TRUCK FACTORING & EFFICIENCY
To avoid these results, truckers need all the help they can get. The current state of the economy is creating many obstacles for many companies, especially trucking companies, to operate in. Expenses are rising at a faster rate than freight prices. According to official energy statistics of the U.S. government, fuel prices are increasing at an astronomical rate http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp. The trucking industry, among others, is experiencing the residual difficulties of the increased fuel rates first hand.

However, fuel prices are not the only expense that affects the bottom line of trucking companies. Other main costs are hidden; the cost of the time value of money. Often, truckers are paid 30-90 days after the work is completed. This results in the fact that the company itself has to bear the expenses of the truck, fuel, wages, and maintenances upfront before collecting any revenue. This in turn leads to a cash flow crunch; which can be the beginning of a vicious cycle which may put the company in jeopardy.

Aside from lowering fuel prices, truck factoring is another way for truckers to stay afloat during these trying times. Thus, Freight Bill Factoring is now becoming more popular with trucking companies to reduce these cash flow issues. Truck Factoring offers a solution to the cash flow crunch. Basically, Truck Factoring is the process of a trucking company selling its invoices to a third party at a slight discount. The trucking company then receives its money right away and can use the positive cash flow to not only maintain but also expand their business. The important distinction of factoring is that it is not a loan; it is a form of asset based lending or accounts receivables financing. The trucking company does not pay any interest on the Freight Factoring, which it makes factoring even more lucrative for trucking companies.

Additionally, Truck Driving Schools are teaching future truckers to be come cost efficient. The industry needs qualified workers to fill the truckers to operate machinery safely and efficiently. These large, powerful machines can make structures look like a deck of cards and where safety is concerned there is no room for error. Truck Driving School, provides cost-effective training with its Nationally accredited training programs. The school offers intensive training, leading to nationally recognized certificates, in the operation and safety of trucks and trucking equipment.