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Greg Dubuque, a third-generation trucker who operates 40 trucks, is feeling the pain of high fuel prices. (Gina Ferazzi \/ Los Angeles Times) <\/p>\n Greg Dubuque, a third-generation trucker who operates 40 trucks, is feeling the pain of high fuel prices. (Gina Ferazzi \/ Los Angeles Times) <\/p>\n
Record diesel prices are crushing California’s truckers, forcing them to adjust to avoid losses as they grapple with the most expensive pump prices in the country.<\/p>\n
Greg Dubuque’s 40 drivers are in a constant diesel-devouring loop. Their big rigs pick up loads of electronics, office furniture and other goods around Los Angeles. They drive close to 1,000 miles through the Mojave Desert and over the Rocky Mountains to Denver. They bring back containers full of everything from pinto beans to home remodeling products.<\/p>\n
One tank of gas for his vehicles cost $600 a couple of months ago. Today it costs $1,000. That’s a record high and more than 35% above the country’s average.<\/p>\n
\u201cCalifornia sets itself apart from the rest of the country when it comes to pricing,” said Dubuque, a third-generation trucker and general manager of Liberty Linehaul West. “Now it\u2019s really out of control.\u201d<\/p>\n
Read more: How the spike in gas prices is jolting California’s giant economy<\/a><\/p>\n The average price of a gallon of diesel in California got close to $7.75 this week, up 50% from a month ago, according to the\u00a0American Automobile Assn.<\/a> The national average of diesel is closer to $5.65 at recent peaks.<\/p>\n The trucking industry was already reeling from a prolonged freight recession, a crackdown on immigrant drivers, and the adverse impacts of tariffs, all of which contributed to a significant increase in bankruptcy filings in the industry.<\/a><\/p>\n Now, the price shock from the war with Iran has become yet another headache for the beleaguered industry that hauls 70%<\/a> of all freight in America.<\/p>\n \u201cIt’s got a tremendous impact on the industry,\u201d said Eric Sauer, the chief executive of California Trucking Assn.<\/p>\n And it is not just truckers being affected. The rising prices of ground and air transportation will eventually be paid for by consumers.<\/p>\n Read more: As oil prices rise, airfares are surging and some airlines might not survive<\/a><\/p>\n The biggest companies are already passing the extra transportation costs on to consumers. FedEx, United Parcel Service, the U.S. Postal Service and Amazon said they will all start charging an extra fee. Amazon said it would apply a 3.5% charge to merchants for its fulfillment service. USPS will charge an 8% delivery fee for certain packages.<\/p>\n \u201cThe longer energy prices remain elevated, the more households will need to confront tradeoffs,\u201d said Philip N. Jefferson, vice chairman of the Federal Reserve, at a\u00a0recent lecture.<\/a><\/p>\n This could eventually dampen demand for other products and further hurt the economy, Jefferson noted.<\/p>\n Story Continues <\/p>\n \u201cFamilies who depend on petroleum products to commute to jobs and school and to heat their homes may need to pull back on more discretionary forms of spending,” he said. “That could potentially result in lower spending at restaurants or retailers. It could also result in households carrying elevated levels of debt.”<\/p>\n Read more: As gas prices rise, California gets punched harder at the pump than other states<\/a><\/p>\n Truckers often rely on fuel surcharges to cover rising fuel costs. It\u2019s an industry practice for customers to pay a fuel surcharge, on top of the base freight rate, to offset unexpected fuel price increases. The fee is calculated based on a weekly diesel price index.<\/p>\n Sukhdeep Singh, who owns Merced County-based Cali Brothers Truck Lines, said standard surcharge policies are insufficient when there are wild swings in fuel prices.<\/p>\n “It\u2019s killing everything,\u201d he said.<\/p>\n Singh\u2019s business faced challenges earlier this year when a crackdown on immigrant drivers<\/a> led to sudden departures, shrinking the available labor pool and leaving 15 of his trucks unused. Despite the diminished fleet, his weekly fuel expenses have surged from $80,000 to $130,000.<\/p>\n Read more: Why are California’s Indian truck drivers disappearing during the holiday rush?<\/a><\/p>\n Smaller trucking companies are getting hit first.<\/p>\n Major carriers with thousands of trucks have different ways to hedge against price fluctuations that insulate them from temporary volatility. They have long-term shipping contracts and have greater flexibility in surcharges.<\/p>\n Smaller carriers are often paid at a flat rate and have no certainty about whether they will recover the higher fuel costs.<\/p>\n On a recent trip to Denver, one of Dubuque\u2019s trucks had to consider returning empty, as the going rate barely covered gas to get back to Los Angeles.<\/p>\n \u201cI wouldn\u2019t be able to cover my cost,\u201d he said.<\/p>\n He has been instructing drivers to save on fuel by planning their routes, finding truck stops with the best rates, and avoiding California when possible.<\/p>\n \u201cWhere we\u2019re trying to avoid buying fuel is here in the state of California,” he said.<\/p>\n He is also asking his regular customers to pitch in.<\/p>\n Liberty Linhaul West’s fleet also works with L.A.’s entertainment and event industries, transporting staging, lighting and other equipment for events such as the Oscars, Grammys and Country Music Awards. He\u2019s started calling customers with whom he had flat rates to renegotiate prices.<\/p>\n \u201cWe started calling customers, saying, \u2018Okay, we need some emergency help here,’\u201d Dubuque said.<\/p>\n While he appreciates that the extra fees and restrictions on fuel help build roads and protect the environment in California, he would love to see more support from the state.<\/p>\n \u201cI think the government needs to interact with the oil and fuel world and talk about how they can take this pain away from us, or at least try to lessen this blow,\u201d he said.<\/p>\n Without an end to high oil prices or some help from the government, customers can expect the same sticker shock the trucking industry is struggling with.<\/p>\n \u201cWhether you’re a grocer, a meatpacking plant, a vegetable grower, that cost has to be factored in, because it doesn’t matter who you are, you’re faced with it,\u201d Dubuque said. \u201cThe impact was so hard and so fast, I would think we’re going to start seeing just another increase to the cost of goods for people.\u201d<\/p>\n Dubuque, general manager of Liberty Linehaul West, says small truckers are hurting with out-of-control gas prices. (Gina Ferazzi \/ Los Angeles Times) <\/p>\n
Liberty Linehaul West trucking company keeps a daily list of fuel prices to help its truckers on April 3 in Montebello, Calif. (Gina Ferazzi \/ Los Angeles Times) <\/p>\n
A Roadies Inc. truck, right, leaves for a delivery in Bakersfield on Nov. 29. (Myung J. Chun \/ Los Angeles Times) <\/p>\n