Fuel, Freight and Future Questions for Motor Carriers

Comments during a conference call hosted by Stifel Nicolaus reflect the ominous tone of the day, Friday the 13th of February.

“The spreads between diesel fuel and gasoline prices and between wholesale diesel and retail diesel prices have never been as wide as they have been at times over the past year or so. These trends have distorted truckload operating results positively or negatively at various times over the past 12 months,” commented John Larkin. At times, the fuel surcharges have helped bolster carrier results, while at other points in the last year, fuel surcharges weren't moving fast enough to keep pace with actual increases. One positive result of lower fuel costs is a slower rate of carrier failures.

Speaking at the conference call, Lana Batts, managing partner of Transport Capital Partners and former president of the Truckload Carriers Association, suggested that even with fuel costs stabilizing, the issues of surcharges haven't gone away. Among the concerns she expressed was a question of whether transportation brokers passed on to carriers the full amount of surcharges they collected from shippers. Going forward, carrier financial results will come out from under the halo of fuel surcharges that helped sustain profits or moderate revenue declines that came with lower freight volumes.

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