‘It’s killing everything.’ California’s truckers are buckling under country’s priciest diesel

Record diesel prices are crushing truckers in California, forcing them to adapt to avoid losses while dealing with the most expensive pump prices in the country.

Greg Dubuque’s 40 drivers are in a constant cycle of consuming diesel. Their big trucks pick up lots of electronics, office furniture and other items from around Los Angeles. They travel nearly 1,600 miles through the Mojave Desert and over the Rocky Mountains to Denver. They’re bringing back containers filled with everything from pinto beans to home improvement products.

A few months ago, the price of a tank of gas for their vehicles was $600. Today it costs $1000. This is a record high and 35% above the national average.

“California sets itself apart from the rest of the country when it comes to pricing,” said Dubuque, a third-generation truck driver and general manager of Liberty Linehaul West. “It’s really out of control now.”

The average price per gallon of diesel in California approached $7.75 this week; This is an increase of 50% compared to a month ago. American Automobile Assn. The national average for diesel is near $5.65 at recent peaks.

The trucking industry was already reeling from a prolonged freight recession, crackdowns on immigrant drivers, and the negative effects of tariffs; all of which contributed to a significant increase in trucking. Bankruptcy filings in the industry.

Now, the price shock caused by the war with Iran has become another headache for the beleaguered industry. 70% All your burdens in America.

“This has a tremendous impact on the industry,” said Eric Sauer, executive director of the California Trucking Assn.

And it’s not just truckers who are affected. Increased prices in land and air transportation will eventually be paid by consumers.

The largest companies are already passing on the extra shipping costs to consumers. FedEx, United Parcel Service, U.S. Postal Service and Amazon all said they would start charging extra fees. Amazon said it would charge sellers a 3.5% fee for its fulfillment service. USPS will charge an 8% delivery fee for certain packages.

“The longer energy prices remain high, the more households will have to face trade-offs,” said Philip N. Jefferson, vice chairman of the Federal Reserve. last lesson.

To help its truckers, Liberty Linehaul West trucking company keeps a daily list of fuel prices on April 3 in Montebello, Calif.

(Gina Ferazzi / Los Angeles Times)

Jefferson noted that this could ultimately reduce demand for other products and further damage the economy.

“Families that depend on petroleum products to get to work and school and to heat their homes may need to pull back on more discretionary forms of spending,” he said. “This could potentially lead to reduced spending at restaurants or retailers. It could also result in households carrying high levels of debt.”

Truckers often rely on fuel surcharges to cover rising fuel costs. It is industry practice for customers to pay a fuel surcharge in addition to the base freight rate to offset unexpected fuel price increases. The fee is calculated based on the weekly diesel price index.

Sukhdeep Singh, owner of Merced County-based Cali Brothers Truck Lines, said standard surcharge policies are inadequate when fuel prices fluctuate wildly.

“It kills everything,” he said.

Singh’s business ran into difficulties earlier this year. Pressure on immigrant drivers It led to sudden departures, shrinking the available labor pool and leaving 15 of its trucks unused. Despite the fleet reduction, weekly fuel expenses increased from $80,000 to $130,000.

Small truck companies take the first hit.

Large carriers with thousands of trucks have different ways to hedge against price fluctuations that protect them from temporary fluctuations. They have long-term shipping contracts and have more flexibility regarding additional fees.

Smaller carriers are often paid a flat rate and there is no certainty whether they will absorb higher fuel costs.

On a recent trip to Denver, one of Dubuque’s trucks had to consider returning empty because the going rate barely covered the gas to get back to Los Angeles.

He said, “I can’t cover my expenses.”

He instructs drivers to save fuel by planning their routes, finding truck stops with the best prices, and avoiding California whenever possible.

“The place we try to avoid buying fuel is the state of California,” he said.

He’s also asking his regular customers to participate, too.

A Roadies Inc. truck, right, leaves Bakersfield for a delivery on Nov. 29.

(Myung J. Chun / Los Angeles Times)

Liberty Linhaul West’s fleet also works with Los Angeles’ entertainment and events industries, shipping stages, lighting and other equipment for events like the Oscars, Grammys and Country Music Awards. He started calling customers with whom he had fixed tariffs to renegotiate prices.

“We started by calling customers and saying, ‘Okay, we need immediate help here,'” Dubuque said.

While he appreciates that extra fuel fees and restrictions help build roads and protect the environment in California, he would like to see more support from the state.

“I think the government needs to engage with the oil and fuel world and talk about how they can take this pain away from us, or at least try to soften the blow,” he said.

Without an end to high oil prices or government assistance, customers can expect the same sticker shock the trucking industry is struggling with.

“Whether you’re a grocer, a meatpacking plant, a vegetable grower, that cost needs to be taken into account because it doesn’t matter who you are, you’re faced with this,” Dubuque said. “The impact was so drastic and so rapid that I think we will start to see another increase in the cost of people’s goods.”