South Carolina Truckers Issue Dire Warning on Diesel Fuel Spike

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by WILL FOLKS

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South Carolina’s trucking industry – which has been helping lead the fight to reform the Palmetto State’s anti-competitive tort climate – is sounding alarms of a different sort this week.

In response to soaring fuel prices induced by the war in Iran – especially the skyrocketing cost of diesel fuel – the S.C. Trucking Association offered an ominous assessment of these “unpredictable cost escalations.”

“If (the price of diesel) stays at current levels or rises further, small and for-hire carriers will see rapid margin compression, higher failure risk, and more pressure to raise rates or exit lanes where they can’t recover their costs,” a news release from the association warned.

That’s significant news for South Carolina – where 65% of the state’s estimated 24,000 registered motor carriers operate just one truck. It’s also significant news for shippers and consumers who will eventually see the impacts of these rising prices on the goods they purchase.

The U.S/Israel-Iran war has triggered a massive spike in the price of diesel – one which has been particularly pronounced here in the Palmetto State.

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According to AAA, the average price per gallon of diesel fuel nationwide currently stands at $4.988 – up $1.341 (or 36.7%) from one month ago. In South Carolina, diesel is currently $4.937 per gallon – up $1.595 (or 47.7%) from last month.

“The vast majority of businesses with a commercial trucking operation are very small and they buy the pump, lacking big-fleet discounts or sophisticated hedging,” Rick Todd, president and CEO of the association noted. “With diesel accounting for around 20-plus percent of operating costs, this is placing severe financial pressures on an already struggling sector.”

According to Todd, “this diesel spike is hitting trucking at the worst possible time,” creating an “existential threat” to the industry.

“Truckers generally have been operating on the thinnest of margins due to a four year-long freight recession, while all of their other costs have been rising sharply,” Todd said. “Those with cash flow and credit challenges are staring at an existential threat. Fuel payment is in real time. But there’s a lag in getting paid. Add all this up and there is no slack available for them to eat these costs.”

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RELATED | TRUCKERS SOUND THE ALARM ON LAWSUIT ABUSE

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According to the truckers, the recent diesel surge is compounding “multiple pressures” including:

• Four-year freight recession with historically low freight volumes
• Economic uncertainty and equipment cost increases have delayed equipment replacement, forcing carriers to hold onto older, more expensive to operate trucks
• Competitive wages to retain drivers and technicians
• Liability insurance and litigation costs continue to outpace other expenses

Formed in 1932, the S.C. Trucking Association has been one of the most vocal pro-business organizations in the Palmetto State – directly challenging the hegemony of South Carolina’s über-wealthy trial lawyer lobby.

Earlier this year, the organization and its members descended on the S.C. State House to advocate on behalf of long-overdue corrections to the Palmetto State’s anti-competitive legal climate.

“For too long, the voices of truckers, warehouse workers, and small business employees have been drowned out in the noise of special interests and insider politics,” Todd wrote in a letter (.pdf) to lawmakers on the occasion of their visit.

Count on FITSNews to keep our audience apprised of the latest developments regarding the ongoing fuel spike… and its impact on the broader state and national economies.

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ABOUT THE AUTHOR…

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.

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