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Articles > Past Issues > 2008 > June 2008 > Leading Question

Leading Question

How are transportation companies adapting to the rise in fuel prices?

Lori Johnston

"It’s killing us," says Teresa Fillmore, president of Dixie Dirt Movers Inc.

The Naples-based broker has seen the number of its subcontractor truckers drop from 50 to five. "A lot of them have left the area. A lot of the guys have lost their trucks due to the slowdown in work," she says. "When we do get work, I don’t have enough truckers to cover it."

In this soft market, Fillmore hasn’t found steps that are proving successful in adapting to the increased fuel costs. In fact, she’s losing jobs to other brokers, who are cutting prices.

Other companies in trucking, air travel and motor-home sales are trying different tactics to make it through the tough times.

Odyssey Trucking Inc. is requesting a fuel surcharge, but operations manager José Moreno says the customers don’t want to adjust. The Fort Myers company subcontracts with about 50 dump trucks and owns five trucks. He says clients are raising prices but they aren’t passing that money on to drivers buying the fuel. "It seems like the driver is getting the short end of the stick. We’re hurting pretty bad," says Moreno, who laid off two workers in late March.

Fuel surcharges also are being levied by airlines and charter services such as Naples Air Inc., based on how much gas is required to make the trip. For example, if the fuel at a destination airport is more expensive than what Naples Air pays at Naples Municipal Airport, the surcharge is applied. Sometimes it can be $2 more per gallon. "People understand that concept. [They’re] having to pay more to put fuel in their car; why would it be in different for an airplane?" says Naples Air co-owner Catherine Fay.

Naples Air also increased prices for flights by 4 percent late last year, but Fay says that doesn’t compare with the 40 percent hike in fuel prices since last year. "Our profit is getting squeezed," she says, although business is up from last year, helping lessen the blow.

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