Yahoo headline just posted- with rising diesel costs, truckers see the end of the road

[Anonymous]

Assuming that "end of the road" means going out of business because of high fuel cost, I don't see that result.  In fact the premise strikes me as a failure to understand economics.  I don't doubt that rising fuel costs introduces complications and instability to the trucking business, but in the end, won't they just pass the cost increase along to the consumer?  The fuel price increase falls on all trucking uniformly, so it does not create a competitive disparity between trucking companies.  And we all need what trucks do unless we can substitute a lower cost form of what they do.  At the very margin, we may be able to substitute railroads, but I doubt railroads could take over very much of what trucks do.

When fuel rises, my trash hauler raises my rate and explains that it is due to increased cost of fuel.  They don't say anything about quitting the trash hauling business.    

[beaulieu]

Great Lakes shipping is definately impacted, lower water levels combined with the government not dredging have reduced the annual carrying capacity of the lake boats noticeably. The rivers are probably hurt too by lower river levels.

[Railway Man]

[ From 1996 to 2005, rail market share of total U.S. ton-miles increased from 33.0 to 38.2, while truck increased from 25.4 to 28.5. (per BTS).  

RWM 

What mode of transportation lost all that marketshare?

I am pretty sure it was a combination of the pack mule and carrier pigeon.

Water and air...

LC

Water and pipeline, actually.  Air market share is volatile because it's so small but it averages out to a growth rate in between truck and rail.  Air market share is expected to shrink considerably, however, for domestic freight, due partially to fuel cost and partially to changes in logistics and improvements in trucking that make trucking much more competitive with air. 

Pipeline loss of market share testifies to our steeply declining domestic oil production -- the commodities they carry are not moving by rail or truck with the notable exception of ethanol.  Ethanol is a refined petroleum substitute and at present does not move long distances by pipeline. 

RWM

[EmpireStateJR]

Hey guys, Let me weigh in with some trucker talk that has been going on for the last couple of months now that fuel prices have again soared. I have been working in the trucking industry for the last three years as a driver and shipper. Most owner operators I talk with these days report that they are just pushing paper but making no money. Consider an eight hundred dollar price tag to fill your fuel tank, several days on the road and a load that pays you fifteen hundred dollars. Factoring in insurance, truck payments, meals etc the owner operator is being severely squeezed. Our company does not ship by rail for several reasons, no rail spur, and the freight is extremely time sensitive to name a few. As a big time rail fan I have inquired about our company utilizing intermodal service but thus far management is extremely reluctant because of the time sensitve material that we ship. Many of the truckers that I see each day have been talking of a major carrier folding in the upcoming year. While this may just be rumor control the current fuel prices and economic downturn make it worthy of continued interest. I am not an expert in the logisitics of the entire problem this is just a report from the loading dock.    

[Limitedclear]

[ From 1996 to 2005, rail market share of total U.S. ton-miles increased from 33.0 to 38.2, while truck increased from 25.4 to 28.5. (per BTS).  

RWM 

What mode of transportation lost all that marketshare?

I am pretty sure it was a combination of the pack mule and carrier pigeon.

Water and air...

LC

[gabe]

[ From 1996 to 2005, rail market share of total U.S. ton-miles increased from 33.0 to 38.2, while truck increased from 25.4 to 28.5. (per BTS).  

RWM 

What mode of transportation lost all that marketshare?

I am pretty sure it was a combination of the pack mule and carrier pigeon.

[Murphy Siding]

[ From 1996 to 2005, rail market share of total U.S. ton-miles increased from 33.0 to 38.2, while truck increased from 25.4 to 28.5. (per BTS).  

RWM 

What mode of transportation lost all that marketshare?

[Railway Man]

Folks, I know that this has been discussed lately, but this is the first time I have actually seen the sentiment expressed in a headline (maybe I need to get out more).  But, is this true, is it really as serious for truckers as the headline suggests, and if so should I assume that trains will fill some or most of the void?  For example, jet freighters will hardly step up to the plate because they consume inordinate amounts of fuel per ton moved.

Comments, please.

-Crandell

It's a mixed picture.  Railroads produce about 4 times as many ton-miles per gallon of fuel than trucks, so their costs are less impacted than trucks as fuel price increases.  On the other hand, rising fuel costs decrease overall economic activity.  As Ulrich pointed out, trucking predominates in short hauls where the high initial and final terminal cost for railroads make them less competitive, and where most shippers and receivers are not rail served in the first place.

The big picture is that rail market share will continue to increase.  From 1996 to 2005, rail market share of total U.S. ton-miles increased from 33.0 to 38.2, while truck increased from 25.4 to 28.5. (per BTS).  That doesn't mean we will see dramatic shifts in market share, but I think we will see steady growth in rail traffic.

RWM 

[Ulrich]

No...almost all shippers pay fuel surcharges which often more than compensate for the rise in fuel prices. However, due to the slowing economy there has been more supply than demand for over a year now, and that has driven rates down.

Most truck freight involves hauls of 300 miles or less. From every standpoint...business, economic, price, and environmental...trucks are the better way to go for these short hauls other than unit train commodity type moves like from mine to utility.  

[selector]

Folks, I know that this has been discussed lately, but this is the first time I have actually seen the sentiment expressed in a headline (maybe I need to get out more).  But, is this true, is it really as serious for truckers as the headline suggests, and if so should I assume that trains will fill some or most of the void?  For example, jet freighters will hardly step up to the plate because they consume inordinate amounts of fuel per ton moved.

Comments, please.

-Crandell