With diesel prices topping $3 a gallon, truckers who often drive hundreds of miles per day in rigs getting well under 10 miles per gallon are being hurt more than anyone. Right?

Well, it depends on whom you talk to even in the trucking industry.

The California Trucking Association gripes that high fuel prices are almost certainly putting large numbers of truckers out of business, at least temporarily.

But one study, along with some people in the business, say that consolidation and changes in industry practices have made it easier for independent truckers to tack fuel charges onto bills that will ultimately be paid by consumers.

“Even small trucking companies have some pricing power,” said Tom Nightingale, a spokesman for Green Bay, Wis.-based Schneider National Inc., the nation’s largest trucking company, which employs 550 in Los Angeles. “Some people say it’s because the deadwood has already been shaken out of the market, and some say they have just begun to realize that they do have pricing power. I think there’s truth to both ideas.”

Diesel prices had already hit $3 a gallon last month in Southern California and supplies ran short following a refinery shutdown. In the aftermath of Hurricane Katrina, average diesel prices hit $3.12 in the Los Angeles-Long Beach area the highest prices ever, according to the Automobile Association of Southern California.

Pricing power


The situation alarmed federal and state officials enough to relax environmental standards to get more diesel fuel into the market, and has prompted interstate truckers to fuel up outside of California before they come in. It also stoked long-standing fears from the state trucking association of truckers idling their rigs.

“There are tons of people who are going out of business, but we won’t know (how many) until we see who is no longer paying their dues,” said Stephanie Williams, spokeswoman for the California Trucking Association. “I have a lot of people that are just parking. They won’t haul merchandise, because you’ve got to front money (for the fuel), and you don’t get paid back for another 30 days.”

But evidence that a spike in diesel prices might not have such catastrophic effects surfaced 18 months ago in a report by the investment banking firm A.G. Edwards Inc. The report showed that trucking bankruptcies no longer correlated with fuel price spikes as they had in the past evidence of increased pricing power by truckers.

Transport Express, a Rancho Dominguez trucking company, is adding 15 percent to 20 percent surcharges to its rates. “Everything is getting passed along,” said company vice president Patty Senecal.

Senecal acknowledged that the company has been taking a short-term hit because it must front the fuel cost, typically getting paid 30 days after delivery. “The only people getting rich here are the oil companies. I just wished I owned oil stocks,” she said.

Nightingale said that continuing high diesel prices and the national shortage of truck drivers had already caused many weaker companies and independent operators to leave the business, which prompted consolidation and altered trucking industry practices.

He said that small fleet owners are offering to have their fleets bought out by larger trucking companies, while independents who own their own rigs and are most vulnerable to rises in fuel costs are increasingly offering their spare capacity to brokerages in order to make sure their rigs are fully loaded.

“I don’t predict that the small guys will go out of business,” Nightingale said. “Some people in the near term might park their truck, but certainly not in the long haul.”

Others in the industry question this analysis. Todd Spencer, executive vice president of the owner-operator Independent Drivers Association, which claims 129,000 members and is based in Grain Valley, Mo., said drivers he knows are doing poorly.

“I’ve talked to lots of drivers who are staying home. They can raise rates to offset the fuel costs, in theory. In reality, if the customer won’t pay it, you can’t. Because the owner-operators are small businesses, they’re price takers. They don’t deal directly with the customer, they deal with transportation companies. They can’t always get higher prices,” he said.

Spencer said the nation’s 380,000 one-truck owner-operators can only compete one way: by offering lower prices. Fuel surcharges simply cut into their business. “They’re quitting every day, but it’s hard to put solid numbers to it,” he said.