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Gulf crisis puts the squeeze on independent truck drivers.

Gulf crisis puts the squeeze on independent truck drivers

Ted Rienguette has been driving transport trucks for 32 years, and he has never witnessed fuel price increases as large as the ones of the past weeks.

Before making his daily run between Sudbury and North Bay for Toronto-based Inter-City Truck Lines (Canada) Inc., Rienguette tells another driver about the cheapest place to buy fuel. Then he shakes his head over the high cost of filling up.

"It's going to drive a lot of independent truckers out of business unless they (prices) come down," he says.

Northern Ontario is a long way from the heat, venomous sea snakes and polluted waters of the Persian Gulf. But no one in the transportation industry will deny they are feeling the bite of the high fuel costs the on-going Persian Gulf crisis has created.

Since Sept. 11 Kingsway Transports, a large North American company (also based in Toronto), has charged customers a fuel surcharge on a rising scale of one to 25 cents per mile, based on the miles driven to deliver the goods.

Other trucking firms have also been passing on the rising cost of fuel to customers.

Most trucks operate on diesel fuel, which is at least 15-cents-per-litre less than gasoline. However, diesel prices rose nine cents per litre between the time the Gulf crisis began and mid-October.

The price of crude oil rose to more than $33.63 U.S. per barrel last month, double the price of mid-June.

As a result the Freight Carriers Association of Canada recommended members increase their surcharges.

And last month the Gulf crisis finally started to affect trucking companies which operate their own filing stations. When their tanks were empty, it was time to start paying the higher prices.

Because of the eight- to nine-cent-per-litre fuel price increase, some companies in the north were levying surcharges last month of one to 2.8 per cent.

"Fifteen per cent of our costs go into fuel, so any jump will make a difference to us," says Peter Armstrong, manager of Armstrong The Mover in Thunder Bay.

As a result of fuel price hikes, Armstrong will likely invest in more energy-efficient trucks.

"It's a decision companies will have to make," he says. "It's gotten to the point where you can't afford an inefficient truck."

Deregulation of the trucking industry and the resulting increase in competition have made it difficult for firms to raise their rates to meet rising fuel costs.

There are more carriers, and more are operating "in the negative," says Len Arnone of Arnone Van and Storage in Thunder Bay.

Jim Lawrie has operated Nickel City Transport in Sudbury since 1964. He says fuel accounts for 25 per cent of his costs and he believes it is fair to pass price increases on to consumers.

"Why not? With government interference it (trucking) is very tight, and there's no money in it. If I don't get that cost, I'm out of business."

But when the economy slows, there may not be as many truckers operating, he adds.

However, none of the companies contacted by Northern Ontario Business are planning to lay off workers because of higher fuel costs.

"Everything is passed on to the consumer," says Bruce McDougall, manager of Inter-City Truck Lines in Coniston.

"You can't help it. When you set your prices, you don't expect this big of a jump."

Whether or not trucking fees rise again will depend on how dramatic the next fuel price increase is, McDougall says.

PHOTO : While motorists are not happy with rising fuel prices, their concerns hardly compare with the financial impact on truckers such as Ted Rienguette, who is seen here filling up his rig in Sudbury before heading out for North Bay.
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Author:Young, Laura E.
Publication:Northern Ontario Business
Date:Nov 1, 1990
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