here's an interesting thought a buddy proposed to me:

if fuel keeps going up,
more and more independent truckers will quit driving and start working at day jobs (wal-mart?) to make the money for the truck payment. (he said he sees a lot of trucks setting by the house in mid NC area)

so if the independents quit, the large carriers will be able to raise prices as needed to adjust for fuel costs.

the large carriers raising prices will be passed on to the consumer.

and prices of milk, bread, and groceries in general will continue to skyrocket.


is this thinking: right or wrong?

 

Have you been to the store lately?

 

why would they keep paying the truck note if it's costing them money to go to work? they'll let the truck get repo'd

 

Ditto on that.

 

ouch. went last night.

bread was $2.69 to $2.85 for a loaf.

vegetables were super expensive, like $4 a lb for some stuff.


i thought bread was still .99 cent a loaf, been a while since i went, i guess...

 

Before I say this, know that I am all for the owner operators out there! When a man cant afford to perform a nobel task such as hauling freight and making an honest living it truely has gotten bad in this "great country" we call America.

The owner operator count vs. large freight carriers really cant be compared. Owner operators make up such a small percentage of freight haulers. What you are saying is going to happen and is happening. Its inevitable. The man hauling the goods is not gonna just absorb the cost and make less profit! Thats just wrong for some one to do that. The ones that pay are me and you! We are the ones that are expected to do without and absorb the cost! Thats just life now days I guess? I hate to say it but I have seen with my own two eyes people that are having to do without because of this situation. I dont know a whole lot about anything but I do know that I am seeing people, honest hard working people doing without basic things because of this. These are not people that are in credit card debt or bought more house than they could afford either. All I can say about the whole deal is if it keeps going poverty seems to be the only end result! I dont know though. If enough people cant afford oil products and really have to quit buying them and start living under a bridge, then I bet the prices will go down. Its a shame we live in such a greed driven society! Welcome to your new third world country. I know I may be thinking way extreme, but I know that I see honest hard working people loosing their jobs and doing without due to this and all I read on here is where fuel price averages in mexico are less than $2.00 a gallon? Whats up with that?

 

While I agree, there are things that the average homeowner can do to reduce the pressure. Instead of going to China-Mart why not go to the feed store and get some seeds? Instead of spending more and more on groceries, take it upon yourself and grow your own vegetables. Instead of buying high-priced beef, go hunting and store some venison or talk to a local rancher and buy a beef and have it slaughtered. Instead of driving all over the place, ride a bike. Instead of having a new 4x4 diesel with 35" tires and a note, downsize to an older truck that gets good fuel mileage. Instead of a 1 year old truck for the husband and the wife and a new 4-wheeler, and a smooth looking Harley, sell off all the useless crap that has accumulated and pay off the house. Instead of talking their heads off on the cell phone on the way to Starbucks, get a prepaid phone and only use it in emergencies, cut out the Starbucks and fast food crap, get rid of the plasma TV and get a normal model, get rid of the satellite and the internet, and all of the useless bills that really do not provide life sustaining benefits to the family.

But instead of trying to reduce exposure, most "Americans" want to complain and go about their lives as if there is nothing wrong and as if they shouldn't have to make changes and sacrifices. Take food for example. How difficult is it to plant a small vegetable garden in your back yard? It's simple, but too many people don't want to take the time and put for the effort to provide for themselves. Or they think they're too good to get their hands dirty.

There are solutions out there, but people are going to have to hear the pop and get out of their comfort zones. They're either going to have to start providing for themselves or they will have to starve. They will have to get rid of expenses that they do not need and only have what is necessary.

 

One thing I was mulling over in my head (and nobody take this political) but what is going to happen when all our soldiers start comming back from Iraq and Afganistan? They will need jobs, but will there be jobs for them to come back to? Will we see a rise in unemployment, or will we see a boom in the economy much like after our boys came home after WWII?

 

tx, not really, there are relatively few people in the service, staffing levels will not be reduced, and with the graying of America, anybody that has the brain cells left to breathe will be employed.

The real issue will be newly graduated employees, will they have the requisite skills?

04ctd, 2.85 for a loaf of bread? I am sorry, it would set there for that price.

I buy the day old stuff for .69 cents............

 

I've been watching this thread with a little bit of interest off and on over the last day or two.

It is a very strange time we are living in, I know fuel prices are affecting me personally in a fairly major personal way. If they continue to rise the way they are my lifestyle will definitely suffer. My fuel bill is insane lately.

However, having grown up in the agricultural industry my whole life a few things spring to mind, it absolutely ammazes me that people are willing to pay $40,000 for a pickup truck, hundreds and hundreds for a wide screen tv, thousands for leather furniture, will drop $100 or more to have dinner out and see a movie for 1.5 hours but $2.85 cents for a loaf of bred has them choked?

Seriously?

What percentage of our income actually goes to pay for FOOD the very thing that sustains us? I'd say it's pretty darn low and an absolute BARGAIN. In fact I think we are BLESSED with an abundant and economical food supply. Yep bread might have gone up a little, but even at $2.85 a loaf, I'd say its still a heck of a deal when you look at what every other product we consume costs these days.

As well, I can certainly understand having a prefference to buy day old bread for significantly less than fresh full reatil priced bread, or any other cost saving measure any of us use in our household, but looking at THE BIG PICTURE, (since this is a thread on Macro Economics, hehehe) figure out how much bread you consume in a year, as a bachellor I know for me it's not that much, those with famillies obviosuly more, but even stillI doubt if I actually buy 25 loaves of bread per year. In fact I know I don't.

So If I saved $2.16 a loaf ($2.85 - $0.69) x 25 loaves would save me $54 a year.

Not something I'm going to worry about. That's only a fraction of what I spend on car washes or windshield washer fluid.

Presently, the cost of food is the furthest issue from my mind.

 

I think the above posts are all very good and it is great hearing them and knowing that we arent alone in this time of whatever you want to call it.

Regardless of where you shop, what you owe, what you drive, active or lazy, or whatever, the fact remains that here in the great country of America we used to have "choices!" Now, thanks to one industry and one industry alone, we no longer have some if not most of those choices. I am all about hard work and providing for myself but it was nice to know that if I wanted to go out and have a good meal in a nice place I could. Thanks to that one industry I now have to think twice. All I am saying is it was nice when I really had choices. Now I have the choice of eating or driving to work it seems?

 

To answere the original question- yes independent truckers will be forced out by high operating costs to some degree, and, yes the higher cost of transportation will be passed on to the consumer. That is plain economics.
I interested, from all the replies here, in hearing from people that haven't seen any "economic downturn" since the fuel costs went up. (might need to open a new thread for that topic!?!?)

 

You are absolutely right. However, placing all the blame on one particular industry is a bit unfair IMO. While the oil cartels do have great responsibility, they are not the only guilty parties here. Suffice to say that another guilty party is the Fed and the idiots in DC. In an effort to keep this thread non-political I will stop there.

In response to the original question, a few nights ago I was talking to a friend and neighbor back home. HE said that since the beginning of the year something like 130 major trucking companies have closed their doors due to operating costs. That of course does not count the small companies with only a few trucks or the independent operators. My friend also told me that every morning at the rock yard where he's working there are usually a couple of guys there asking if there's a dump truck they can drive for the day since they had to park their rig. The operating costs will always be factored in and passed along to the consumers.

I do see the potential for a serious downsizing or "localizing" of America, which isn't necessarily a bad thing. For the older folks out there, you will surely remember the 50s and 60s when there was a railroad depot in every small town which was the center of commerce. Packages were sent there and could be picked up. You could buy a ticket and ride in relative comfort pretty much anywhere in this country one could want to go. Trains moved most of the freight and most industries like feed mills and such all had a spur for getting in orders. I can see this sort of scenario unfolding again. Imagine the money you'd save by buying a $100 ticket that will take you 200 miles (as an example, don't know what the rates would be.) Imagine freight costs being cut in half. Remember that today's diesel-electric locomotives burn fuel oil and/or off road diesel. They don't have to pay the highway fuel tax and they buy large quantities so their cost-per-gallon is much less. If I had the option I'd readily take the train. But that will involve reinvesting in our country's infrastructure for a change.

 

Owner operators are not a small percentage of truckers as posted above but a large percentage of them. Many, including myself do work that a big company cannot handle effectively. The government has been trying for years to put us out of business and have somewhat suceeded. Watch California where the docks will no longer load owner operators but only union company drivers.

Big companies get their fuel cheaper, tires cheaper, parts and repairs cheaper, but charge more to move freight.... not cheaper. But of course the Mexican trucks will solve all the freight moving problems, thats where its going.

Moving auction cars right now is slow, but after the new car dealers finish giving last years cars away, and Chrysler stops guarenteeing 3.00 gas for many months to sell them, used cars will be back. I am making less, cutting costs, staying in. When half the truckers go out of business and the used car business picks back up, I'll be here.

I was fortunate, I paid off most of my credit and only have $9000 left to pay on the truck. That is now my only debt other than the running costs, insurance, fuel, parts and repairs. Of course phone and internet. Lately spend most of the time in the truck, eat in the truck. Got set up to do that before the bad times came. Being single and old, it does not matter if I stay at home or in the truck out of town till the next load comes up. I never idle the truck, drive at 55 or 56, now get between 8 and 8 1/2 mpg and burn an amount of used oil to help the costs. Soon will pull one drive axle and hope for near 10 mpg and less tires.

 

Haulin, not trying to be nosey, but with fuel prices what they are, what do you estimate your yearly expenses are? Obviously you have a note, but other than that, what are you paying for fuel, maintainence, etc? Also how does that compare to a company driver for a large hauler like Schneider or JB Hunt for example? I'm trying to get a picture of the big difference in costs between being an o-o and a company driver.

Again, I'm not trying go be nosey and if you don't wanna give out that information I'll understand.