Trickling Down to Nothing
Kristy Chin, Journalist, Our Staff
Fuel costs aren't burning a hole through just your wallet or pocketbook – they're destroying the American Dream for thousands of families as the costs of both being a customer and earning a living spiral out of control. NPN Magazine reports that during the course of the last year, over 3,000 gas/fueling stations have gone out of business as increasing numbers of drivers follow the lure of cheap fuel prices and ignore independent stations.
Numerous other industries are choking, as well, especially those such as trucking or moving companies where the pricing structure is very intimately tied to fuel costs. As the price for a gallon of diesel soars toward the $5.00 mark, truckers and movers go from a state of concern to one of panic.
As Bob Costello (the American Trucking Association's chief economist) explains, "We were caught off-guard, and now some [companies] will have to close up shop."
Throwing Out the Baby with the Bathwater
Within the last couple of years, the expense associated with driving a moving truck has skyrocketed by almost 58% (from $.80/mile to $1.40), and the sole culprit is the price of diesel.
While moving business owners have the ability to pass on the increases to customers during a move, the cost of driving without cargo (aka "deadhead")—as the driver goes to or returns from a move—has become a sinkhole, devouring profits left and right.
"The deadhead is what's really hurting us," says Dan Klein, president of the National Moving Contractors Association, a professional organization for independent movers.
The trucking industry watched approximately 1,000 fleets go belly-up in the just the first quarter of 2008. Those companies that are actually managing to stay in business are charged with the unenviable task of downsizing the number of drivers and trucks in their fleets.
Other transportation services are limping along, also. The Taxicab, Limousine & Para transit Association reports that the expense of driving a taxicab has swollen nearly 40% from 2006 to the present day, constituting, essentially, a pay cut of over $3,800.00 to the average driver's income in 2008.
No Charity for You
And it's not just the for-profit enterprises that are feeling the crunch. Numerous charities or non-profit organizations, already operating with a limited income stream as donors tighten their purse strings, are being crippled by the gap of budgets set far ahead of this fuel-cost explosion.
Throughout the country, Meals on Wheels programs, an organization through which volunteer drivers hand-deliver food to home-bound senior citizens, the volunteer pool has shrunk by over 58%.
The National Volunteer Firefighter Council reported that at least one fire department in New Jersey was forced to close due to fuel costs. Not only will there most likely be others that fold, but those that do remain in existence will be forced to narrow the radius of the areas they serve.
And more likely than not, reports such as these make up just the tip of the iceberg.
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