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DEL.ICIO.USMore costly, but still truckin’
The Atlanta Journal-Constitution
He was 16 the first time he drove a semi.
In his native Pittsburgh, Dean Masson worked for a neighbor who ran a warehouse and moving business. Masson helped to pack, load and unload. Some of the truckers would turn the wheel over to him in the parking lot or on a vacant stretch of road. It marked the start of a career for the 45-year-old Lilburn man.
Masson runs mostly in-state routes for Old Glory Trucking of Stone Mountain. “Drop and swaps,” he calls them. The Badie Tour rode shotgun with Masson on Wednesday morning to get a view of the traffic from the cab of a rig.
Sitting up high definitely gives you a better view of the road. The ride was comfortable, and you could definitely feel the difference between a loaded and empty trailer. The hardest part, really, was getting in and out of the cab, something Masson does dozens of times every day. It’s almost like climbing a short ladder.
Of course, you can’t talk to a trucker without talking about diesel fuel, which is used in the trucks that transport most food, industrial and commercial goods. It averaged $4.22 a gallon in metro Atlanta on Wednesday, according to AAA’s media site.
Independent truck operators, along with fleet outfits that employ truckers like Masson, feel the pinch at the pump. Rising fuel prices cut into profits, even with a bump in freight rates. Independent operators can easily find themselves out of business if their rig isn’t paid off. And there are always operators who try to undercut competitors, only to wind up losing their shirts.
Masson’s Mercedes-Benz-powered rig has a 200-gallon tank. Do the math.
“A lot of trucks hold 300 gallons,” said Masson, who doesn’t let the gauge drop lower than a quarter of a tank. Fortunately, he has an employe—issued credit card, thanks to Bill Giddings, owner of Old Glory Trucking.
Jerry Richter of Conyers isn’t so fortunate. The independent trucker made a delivery Wednesday to ABC Polymers Inc., a recycling business off East Ponce de Leon Avenue. He, like Masson, didn’t think the truckers’ protest held Monday in Washington would amount to much. Some truckers want Congress to stop subsidizing big oil companies, release oil from the Strategic Petroleum Reserve and end exports of oil from Alaska.
“The only thing that doesn’t go up are the wages,” said Richter, who routinely shells out about $900 at the pump.
Giddings started Old Glory in 1989. His nine-truck fleet mainly serves the Southeast, though he has one client in Green Bay, Wis. Giddings said he was at a loss to explain the rise in diesel fuel, much less how to fix it.
“No idea,” he told me. “I’m just like anybody else. I don’t understand it when I see the price of a barrel of oil and they say all the reserves are full, and that there’s no shortage. It’s just economics, I guess.”
Giddings runs his business like a miser. He tells Masson and the other drivers to save at the pump, even if it’s a penny per gallon.
“If it’s $4.20 on one side and $4.19 on the other, we go for the $4.19,” he said. “It doesn’t sound like much, but it adds up on every gallon.”
I rode shotgun on three runs with Masson. We went from Doraville to Stone Mountain to College Park, then back to Stone Mountain. Traffic was relatively mild and fluid.
“Whether you’re in Atlanta, South Florida or Houston - all drivers are basically the same,” he said. “No matter what speed you’re going, someone is going to pass you.”
Rick Badie’s column appears on Sundays, Tuesdays and Thursdays. Contact him at 770-263-3875 or e-mail: rbadie@ajc.com.
Permalink | Comments (20) | Post your comment | Categories: Rick Badie
Comments
By LT5000
May 1, 2008 9:20 AM | Link to this
Some truckers want Congress to stop subsidizing big oil companies, release oil from the Strategic Petroleum Reserve and end exports of oil from Alaska.
Another Barack Obama Infomercial brought to you by Rick Badie.
Didn’t he just write this same stupid article 2 weeks ago under a different title?
This one should be titled “I don’t understand Economics so I will blame the Oil Companies”
Low dollar, supply and demand and OPEC won’t increase production. Oh yeah, there hasn’t been a refinery built in the USA in 25 years.
LT5000
By baby oil
May 1, 2008 10:16 AM | Link to this
Have refineries been closed in the USA in the past 25 years?
Oh yeah.
w00t
By Norcross
May 1, 2008 10:20 AM | Link to this
“No idea,” he told me. “I’m just like anybody else. I don’t understand it when I see the price of a barrel of oil and they say all the reserves are full, and that there’s no shortage. It’s just economics, I guess.”
I love the fact that he actually states that its economics at work, all the while acting as if economics is some magically hard to understand power.
And you are not like “anyone else”. Most people understand supply and demand. Although to say that the government, OPEC, oil companies and activist do not play a part is plain silly.
By One Man's View
May 1, 2008 12:08 PM | Link to this
Supply and demand curves are Econ 101, but they are only a mere approximation of real world workings. There are plenty of factors that impact purist notions of supply and demand. For example, collusion, monopolies, lack of alternatives, lack of information to name only some of the obvious.
The idea that oil has to be at $115 due to some inexorable economic law is not correct. Economic ideas are just that - not like laws of gravity or the like.
Economics is really all about “Who can get how much from whom with the smallest cost and get away with it.”
By Bruce Wilcox
May 1, 2008 12:36 PM | Link to this
No one want to stop imports from Alaska, people just want to save ANWR, one of the only untouched natural sites we have left. But even if they went in and destroyed the area it would be ten years before we would receive any oil from it. Plus, no one really knows how much oil is down there.
Refineries, a few have closed, the oil companies refuse to maintain them properly, assured break-downs I guess.
The excuse from Big Oil is they cannot build any due to enviormental laws is pure moosedung. With republicans in charge of Congress for 12 years and bush the oil president how many enviormental laws have been watered down? If Big Oil wanted to build one to replace the city of New Orleans it would have passed.
OPEC giving us, of all people, the shaft, gee it wasn’t that long ago bush was holding hands with the Saudi Prince at the ranch, did they break it off? Maybe we should stop threatening and invading Middle East countries or cheering when Hugo gets ousted for a day.
What happened to bush’s commitment to alternative fuels when he just want to drill for more oil?
The only exploration Big Oil is doing is in there wallets.
Today Home Depot is having a big lay off, several airlines shut down, I can’t see how an independent trucker can make it anymore.
We subsidize Big Oil and Wall Street, isn’t time to address the needs of the little guy.
By Norcross
May 1, 2008 2:12 PM | Link to this
There is no easy answer for any of this. The Republicans has plenty of time to do something….nothing happened. The Democrats have had 2 years to make something happen, granted it is harder for them not having control of the white house to go with Congress, still nothing happens.
Who ended up working to most to solve the problem? Toyota and Honda, their sales contiune to climb, their MPG and the track record of no problems lead people to buy their ugly cars in the 80’s and now their cars look better, drive better, get better gas milage it appears.
I guess I am saying that the auto makers responded to the problem by making cars that use less gas. Mean while our elected officals sit on their butts.
I am scared that Bruce may be turning me into a liberal though….oh no. :-)
By LT5000
May 1, 2008 3:27 PM | Link to this
Brucie likes to use any excuse to blame Bush. Of course, every one of his arguments doesn’t stand up to the facts.
We now have less refineries operating in the US than we did in 1986.
But Brucie won’t let us drill in ANWAR, even though 99.5% of the US population will never visit it.
Bruce doesn’t worry though, he can always get some extra money in the public restrooms through Atlanta.
By the way, with such stupid articles is it any wonder why the AJC’sa circulation is tanking?
LT5000
By Norcross
May 1, 2008 4:55 PM | Link to this
99.5% of the population doesnt know what ANWAR stands for, and given our education system couldnt find the “A” on the globe.
By Norcross
May 1, 2008 5:02 PM | Link to this
oops I forgot its ANWR
By What're you, and idiot
May 1, 2008 7:28 PM | Link to this
One of the worst ideas in a while is the gas tax holiday proposed by McCain and embraced by Clinton. Don’t get down on John Q Public for not understanding economics when 2 of our Presidential finalists obviously don’t.
By jim d
May 2, 2008 8:52 AM | Link to this
Bruce,
You do realize of course that the refineries operating in the US today are only operating at about 85% of their capacity, Right? I’m afraid the new refinery construction argument fly’s out the exhast pipe.
But HAGD.
By jim d
May 2, 2008 9:02 AM | Link to this
One other little thing Bruce,
High crude prices are significantly hurting refining margins.
So what oil companies are doing is cutting output at the refineries due to high supplies and falling demand. Thus giving everyone in the supply chain, from refiners to retailers, the ability to raise prices to try to boost margins.
By Bush-whacked
May 2, 2008 9:23 AM | Link to this
Oil Prices Blamed on U.S. Crude Reserve Buildup December 13, 2007 Marianne Lavelle
Did the Bush administration’s move in August to resume filling the Strategic Petroleum Reserve—taking off the market a crucial amount of favored light, sweet crude supply—trigger one of the largest oil price run-ups in history? One leading petroleum economist, Philip Verleger, thinks there is no other plausible explanation why oil rocketed from the low $70s to almost $100 per barrel in November.
The Department of Energy has consistently said that the amount of oil it adds to the nation’s emergency stockpile is too small to affect world prices. But in Capitol Hill testimony this week, and in a more detailed presentation Wednesday at the Peterson Institute for International Economics in Washington, D.C., Verleger argued that the amount is indeed significant because of the extraordinary premium that the market now places on cleaner crude oil—the light, sweet variety.
Verleger acknowledged that he has a reputation for being “an outlier” in his oil market analysis, often bucking mainstream views. But he says that fortunately for his theory, and unfortunately for the rest of us, there will be an opportunity to test its validity in the coming months, when the Department of Energy is going to increase the percentage of light, sweet crude it adds to the SPR from about one third to two thirds. Verleger argues that according to the calculations he’s done—and he admits the results are unbelievable—it could mean the difference between $60-per-barrel and $120-per-barrel crude oil in the months ahead.
“This is an accident that does not need to occur,” he says. “We are running an economic experiment we don’t need to run.”
The problem, as he sees it, is that light, sweet crude is now highly prized on the market, because in a program that started in 2006 and is being phased in through 2009, oil refiners are required to produce ultralow-sulfur diesel fuel for trucks, buses, and other diesel vehicles. It’s much easier to refine this fuel out of light, sweet crude, which already has low sulfur. Heavy, sour crude—which is by far the majority of the oil on the market—is high in sulfur and harder to refine into a fuel that meets the new environmental standards. Heavy, sour is in surplus and cheaper than light, sweet crude.
Verleger argues that the Energy Department ought to stop stockpiling light, sweet crude, sell off what it has, and instead buy cheaper heavy, sour. It may mean that in the case of an emergency the federal government would have to relax environmental regulations, as it did after Hurricane Katrina, to allow higher-sulfur diesel back on the market temporarily, he says. But the government could buy even more oil at a better price and reduce the risk of further spiraling oil prices. “DOE’s current action is needlessly risking the health of the U.S. economy,” he says.
Guy Caruso, administrator of the U.S. Energy Information Administration, which doesn’t set policy but analyzes the energy markets, says he is unconvinced by Verleger’s analysis. “It seems to be what he’s saying is that world oil prices are really hypersensitive to these very small changes in light, sweet crude,” he says. He adds that Nigeria’s turmoil has sometimes reduced light, sweet crude on the market by 500,000 barrels a day without such price run-ups. (The amount being added to the SPR this month totals a bit more than 32,000 barrels per day.)
But Verleger says the market may be more sensitive now than it was when Nigerian production was cut. One factor that magnified the price rise, he says, was the prevalence of “delta hedging,” or the purchasing of call options by large consumers like airlines, to lock in a reasonable price for fuel. Verleger argues that the financial institutions that had written these calls were forced to buy additional futures as the oil price began to rise, thus amplifying the impact of the oil DOE took off the market. The result, in Verleger’s words: “market chaos.”
Plenty of theories have been thrown about for this fall’s big oil price run-up—the weak dollar, recession fears, sheer speculation—but this is one that is at least worth examining closely, since it happens to be one of the few market factors we can actually control. President Bush has called for doubling the capacity of the SPR and has already taken steps to prepare for its expansion.
By jim d
May 2, 2008 9:31 AM | Link to this
“What happened to bush’s commitment to alternative fuels”
Unfortunately he’s living up to it! thus higher food prices.
By Poster
May 2, 2008 9:59 AM | Link to this
Well, my my, it seems someone removed my post:
Perhaps we can replace Rick Badie’s “articles” with a comic strip..?
By Michael H. Smith
May 2, 2008 11:36 AM | Link to this
When Bush took office gas costs around $1.44 per gallon, now gas costs around $3.60 per gallon?
http://tonto.eia.doe.gov/dnav/pet/hist/mgttusW.htm
Now why would any oil company want to increase the supply of oil?
Ethanol is blamed for driving up food prices?
Brazil achieves energy independence in about 3 years using ethanol derived from sugar cane. Does the U.S. give subsidies to the sugar industry in the country and are there prohibitive tariffs imposed on the importation of sugar and of ethanol?
France generates around 70 percent of its energy through nuclear power, any reports of a “China Syndrome” occurring in France, a 3 mile island or grave concerns about disposal of spent nuclear fuel?
America has been labeled the Saudi Arabia of coal. Over at MIT some clever fellow discovers captured fuel gas from coal fired power generating facilities is an excellent feed stock for algae; algae that can be turned into bio-diesel. Will anyone figure this riddle out?
Cars reported to get a 100 mpg are popping up all over the place in the news, while Congress dilly-dallies around with café standards and mandates cars of 35 mpg. Yes, Congress, Yes George Bush, I believe the both of you, in spite of what my lying eyes tell me.
Between the Congress and our President how can anyone disbelieve that they are really looking out for the interests of the American people?
By Norcross
May 2, 2008 4:54 PM | Link to this
Micheal H Smith….bringing the pain and earning some points.
Well said.
Someone just got SERVED.
By jim d
May 2, 2008 5:29 PM | Link to this
Let’s see.
http://www.google.com/search?hl=en&q=ethanol+food+prices&btnG=Google+Search
This may simply be an effect caused by the USA’s intelligence in using food for fuel though.
By Michael H. Smith
May 3, 2008 12:08 AM | Link to this
Ethanol is not the culprit behind driving up food costs nor is it to blame for the even more ridiculous mislaid thoughts of either creating or exacerbating a shortage of food supplies anywhere in the world.
It is rather the USA’s Congress and President’s lack of using intelligence (now available) to purely serve the interests of the American people in their entirety (darn right I’m a populists).
Think Cellulosic Ethanol. Think removing subsidies on sugar and corn. Think removing tariffs on imported sugar and foreign produced ethanol. Think of eradicating alot of domestic and foreign debts produced from buying oil and the costs of protecting oil interests around the world militarily. Think “real competition” in the energy marketplace, where speculators and manipulators are severely held at-bay. Think affordable flex fuel hybrid cars actually made in the USA, powered from three or more energy sources not mentioned in this comment.
Google or Yahoo that.
… And may the energy independence bug kindly bite you on the wallet.
By jim d
May 6, 2008 7:49 AM | Link to this
Ethanol from corn: burning money and oil