Diesel stalls area truckers

Skyrocketing diesel prices along with the economic downturn are proving to be a one-two punch for the local trucking industry.

Truckers and trucking companies are slowing down their rigs and even using sophisticated software to help cut costs.

Speed-limiting devices called "governors" limit how fast truckers can go, sometimes as low as 62 mph.

"They are out there doing anything they can think of to save on fuel," said Don Schaeffer, executive vice president of the Mid-West Truckers Association, an industry association based in Springfield.

While the average national price of a gallon of gas Tuesday was $3.255 a gallon, according to AAA and the Oil Price Information Service, the average diesel price was $4.026 a gallon.

In the Chicago region on Tuesday, the average price of a gallon of gasoline was $3.395, and it was $4.247 for diesel, according to the AAA.

At Naperville-based Joe Dieter and Son's, truckers fill up at the company fuel station and a surcharge is placed on customer orders.

"Sometimes the surcharge makes us whole but sometimes not," said Dave Moss, manager of safety administration at the firm.

Chris Dahm, president of Dahm Trucking Inc. based in Woodstock, said his company sometimes takes a significant financial hit, particularly on long-term contracts that do not take fuel price into consideration.

"Three-year contracts are hurting us the worst," Dahm said. "I think this recession … will be worse than people think. From food prices to the price of clothing or shoes, they'll all be going up because it is more expensive to get products to the customer."

Dahm said some owner-operator truckers working with him have dropped out of the industry. Some also are thinking of participating in an April 1 national strike to draw attention to their plight.

Industry economists say diesel prices are being driven up by increased demand from the growing Chinese and Indian economies. Also, diesel is more expensive because it costs more to produce now that the U.S. switched to a low-sulfur blend, according to the U.S. Department of Energy. And the federal excise tax is six cents more for diesel than on regular gasoline.

That switch to the low-sulfur engines is credited with a slowdown in overall truck sales, according to Roy Wiley, a spokesman for Warrenville-based Navistar International Corp., which makes a variety of truck sizes.

"We don't know if it is just fuel costs that is doing it or just the slowing of the economy, but the market is still soft," Wiley said.

Caught in a bind between how much cost can be passed along to customers and slumping shipment demand, many trucking companies are declaring bankruptcy.

Bankruptcies in the trucking industry rose 52 percent last year, according to the American Trucking Association, based in Arlington, Va.

"If diesel prices remain at where they are, we could expect more bankruptcies this year," said Tiffany Wlazlowski, a spokeswoman for the American Trucking Association.

Some companies have learned from the squeeze and are selling software to help truckers save, according to Gary Hallgren, chief executive officer of Remote Dynamics, the Plano, Texas-based maker of REDIview.

REDIview uses global positioning systems and wireless technologies to give real-time, Web-based reporting on truck performance. By cutting down on idling times, unauthorized trips, inefficient trips and other measures, Hallgren said his system can cut fuel costs by 10 percent to 15 percent.

"As the dollar amount goes up for fuel, our system becomes more affordable," said Hallgren, adding sales this year are up.

In the meantime, trucking industry workers remain uncertain about their prospects.

"We aren't sure what is going to happen," Dahm said. "It's a struggle right now."