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COMMENTS * USA - Truckers' costs rise, demand still down
NEW YORK,NY,USA -AP/FXstreet/AFXnews/The Foreign Exchange Market (Barcelona,Spain) -13 April 2007: -- The trucking industry suffered the brunt of weak freight demand in the transportation sector late last year and while analysts aren't banking on a rebound in their fortunes anytime soon, shares of some key names are beginning to show new life... Although truckers recoup some of their fuel costs through surcharges to shippers, it can take weeks for them to catch up with actual pricing and when prices rise and fall rapidly, carriers can lose out altogether. According to the American Trucking Associations, an increase of one penny in the price of fuel on an annualized basis costs the industry an additional $381 million a year... On top of higher fuel costs, truckers will also pay more for their equipment this year. With new emissions regulations in effect this year, trucks with engines designed to burn ultra-low sulfur diesel fuel now cost up to $15,000 more than previous models. Maintenance on the new engines also costs more and they are less fuel efficient than their predecessors. Ultra-low sulfur diesel fuel also costs more at the pump and analysts think prices might advance further when off-highway vehicles start using it later this year and inventories grow tighter... The industry's driver shortage shows no signs of improving, either, so companies continue to pay a premium to put qualified people behind the wheel. Analysts think the industry is about 40,000 drivers short, while the American Trucking Associations says the number could reach 111,000 by 2014 if trends continue... Against this backdrop of rising costs, freight demand remains soft after an unusually weak fourth quarter. According to the latest data from the American Trucking Associations, tonnage in January and February fell compared to the same period last year...
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