High fuel prices hurt area trucking firms

June 21, 2008|By ARNOLD S. PLATOU

HAGERSTOWN -- The next time you're on Interstate 81 in your 1996 Honda griping about getting only 22 miles per gallon, think about Randy Winebrenner's 2006 Volvo tractor-trailer in the next lane.

The best in his fleet of 10 big rigs, the Volvo gets just 5 miles per gallon -- "if we're lucky," said Winebrenner, vice president of Winebrenner Transfer Inc. of Hagerstown.

As of this past week, diesel fuel was costing his company "close to $5 a gallon. That's 800-and-some dollars for one fill-up," Winebrenner said. "Yeah, and they wonder why they're reading about all the bankruptcies."

Jim Ward doesn't wonder. As president and CEO of D.M. Bowman Inc., which with 375 big trucks is Washington County's largest privately held hauler, Ward knows well the problems facing the industry.


"These times are as challenging as probably any I have seen in the industry," he said. "... It's not just Bowman, but as an industry, it has created significant impact."

In Washington County, you can figure this directly affects all 16 trucking firms listed in the county Economic Development Commission's Business & Industry Directory. There are other such firms here, as well as other kinds of businesses drawn by the county's transportation magnet -- the crossing of Interstates 70 and 81.

Those 16 alone employ nearly 1,600 workers. Plus, there are the people -- reported at 1,362 in February -- who work at the Volvo Powertrain North America plant in Hagerstown, which makes the engines for all of the Mack and some of the Volvo trucks.

Ward said this crisis affects all of us.

"Trucks haul 70 percent of freight tonnage" in the nation, he said. "And, 80 percent of communities receive all goods exclusively by truck. So if you bought it, a truck brought it."

Prices at the pump

According to the federal Energy Information Administration (EIA), the average price nationwide last week was about $4.69 for a gallon of diesel. That's the same price as the week before, but up $1.88 per gallon from a year ago, the EIA said.

Looking ahead, the increases might moderate. According to the EIA's Web site, "Retail diesel fuel prices are projected to average $4.32 per gallon in both 2008 and 2009, an increase of $1.44 per gallon over the 2007 average."

Gasoline, meanwhile, was up $1.07 from a year ago to an average of $4.08, the EIA said. Regular-grade is expected to peak at $4.15 in August.

The costs of hauling

"This is the roughest that I've ever seen it," Randy Winebrenner said.

His father, Ronald, founded the family trucking company in 1977. Randy, 48, joined the business the following year.

"Your hand shakes when you're signing them checks" to pay the gas bills, Randy Winebrenner said. "For the eight trucks I ran last month, my monthly fuel bill was $60,000. ... It's just one hell of a mess."

Winebrenner, whose trucks haul mostly building materials as far as New England and the Carolinas, said the fuel price increases are putting truckers "in the poorhouse."

He said he recently read that "900-and-some trucking companies filed bankruptcy in the first three months of '08, if that gives you any idea what that's doing to us."

Even one of his own drivers, an independent, was forced to sell his truck, he said.

"The fuel price put him out of the business," Winebrenner said.

Winebrenner blames big oil companies for the "ripoff" and the federal government for not controlling it.

As the economic shakeout continues, Bowman is picking up some business, Ward said.

"We had experienced a slowdown in the freight tonnage index ... last year for several months and into this year, but I will tell you in the last 30 to 60 days, we have seen a firming up" in some areas, he said. "We see some of that in the freight capacity being taken out of the system."

Fewer freight trucks are on the highways now because several companies "have reduced the size of their fleets," Ward said. "And I also believe that bankruptcies are on the rise as a result of the economic condition as well as the fuel prices."

Sales business is slow

And then, there's Carl Finafrock.

Finafrock, sales manager at Baltimore Mack Trucks Inc., the Mack and Mitsubishi truck dealership in Hagerstown, doesn't have to drive a truck to know how much the fuel prices are hurting business.

"It's extremely slow, extremely slow," he said. "This fuel thing is just killing us right now."

Sales slowed considerably in 2007, when tighter pollution standards were imposed on new trucks. Then, at midyear, "we get hit with the economy and then everything else since then," Finafrock said.

"This is my 31st year" in the business, he said, "and this is the worst I've seen it. EPA standards, fuel costs, insurance costs and then, the economy. It all adds up."

Area hauler finds ways to put the brakes on expenses

WILLIAMSPORT -- Pinching pennies is paying off for D.M. Bowman Inc. as the big trucking company rolls on amid rising diesel fuel prices.

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