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Truckers Face Many Challenges
December 15, 2007 Official Board MarketsTruckers Face Many Challenges
Domestic truckers face numerous challenges in the months ahead, says Mark Martin of Swift Transportation, who spoke on the subject as part of a transportation panel discussion at the Paper Stock Industries (PSI) Fall Conference in Phoenix last month, reports Recycling Today. The biggest one is the rising cost of diesel fuel.
Swift says in the past two months alone the increase in the price of diesel fuel has lead to a 0.1 cent per mile increase in operating costs. He adds that high fuel costs are also likely to drive consolidation in the trucking industry, as well as lead to an increasing number of companies filing for bankruptcy.
Fuel is also one of the biggest challenges facing the shipping industry, says Greg Dixon, Zim Line, who spoke on the same panel. He says the cost of bunker fuel has risen. For a company that uses 1.6 million tons of bunker fuel per year, that has meant a significant increase in the overall cost of shipping material. Bunker fuel represents about 60 percent of the operating costs per vessel.
Another speaker on the panel was CSX’s Steve Potter, who said rail infrastructure is aging and will require a significant financial investment in the next couple of decades to address its needs. He adds that challenges on the highway could benefit the rail network. He also points out that growth in vehicle miles traveled has increased, but available lanes of highway have not grown to match that demand, leading to highway congestion that could benefit the rail industry.
Problems extend further than the modes of moving material from buyer to seller, states panelist Mario Bruendel of Fr. Meyer’s Sohn North America. He says many warehouses are also operating at full or near capacity, which has driven up rates. Changes in port routes to major export destinations like India are also causing logistical challenges because certain ports of call in India aren’t deep enough to accept ships with full capacity.
