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VOL. 119 | NO. 166 | Wednesday, September 14, 2005

Trucking Industry Feels Katrina's Impact

Fuel prices take biggest toll on local transport companies

By Rosalind Guy

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AFTER-EFFECTS: Express Plus office manager Lori Purser says the family-owned trucking firm has taken a hit in profits as a result of skyrocketing fuel prices. -- Photograph By Rosalind Guy

When Hurricane Katrina slammed into the Gulf Coast, the impact was felt across the region, with all types of businesses experiencing ripple effects in the wake of the storm.

The trucking industry is among those segments of the business community that were the most hard-hit. At the industry's core is the need for a readily available supply of fuel to operate trucks as they transport goods across the country - and fuel is sometimes among the goods being transported. And that need is heightened now with an increased urgency for products and supplies as surrounding states assist in recovery and relief efforts.

Small companies take hit. Mississippi-based Express Plus LLC escaped the wrath of the storm and suffered no physical damage to its offices, but the company is taking a financial hit because fuel prices have continued to soar since the hurricane made landfall Aug. 29. In recent days, prices have seen slight declines, but in most areas remain around $3 a gallon.

Lori Purser, Express Plus office manager, said the rising fuel prices have been the main negative consequence of the damage the hurricane wreaked on fuel supply lines in the Gulf.

"We're basically losing money right now," she said.

High fuel costs are not something the family-owned business wants to pass on to its customers. So it has been forced to take a cut in profits.

When dispatching loads, Purser said, the company has tried to avoid altogether the areas hit by Hurricane Katrina. But the day before the storm reached land, Express Plus did have one driver headed to Louisiana to deliver a load.

"The driver had to turn around and take the load back to Maryland," Purser said.

Rising prices. Dwight Basset, chief financial officer for Builders Transportation Cos. LLC, said the effect of the massive storm on his company has been minimal, limited to the fairly drastic increase in fuel prices brought on by diesel shortages throughout the Southeast.

"Obviously, buyers are thinking twice about where they can spend their money, whether it's on the down payment for equipment or whether it's in their fuel tank."
- Jason Soika
center manager, SelecTrucks of Memphis

Due to the reduction in oil supply following the storm, Basset said his company saw the price of fuel rise about 20 cents to 22 cents a gallon. He also noted that small, independently owned truck stops experienced a shortage of fuel, some running out.

However, Builders Transportation, a flatbed carrier that transports materials such as steel, lumber and pipes primarily throughout the eastern two-thirds of the United States, purchases its fuel from a large supply chain Pilot station. That station was able to reroute fuel from other stores within the chain that are located in areas of the country not affected by the hurricane.

Basset said none of the company's drivers were placed in harm's way as the hurricane slammed into the Gulf Coast region because the company had plenty of notice to get drivers out of the area. However, some drivers who live in the Mississippi area suffered property losses.

Need for supplies. Jason Soika, center manager for SelecTrucks of Memphis, a retailer of Class-8 vehicles, said that since recovery efforts began, his company has responded to an increased need for equipment.

"What we've seen is people quickly needing equipment to help out with the relief effort," Soika said.

The fuel issue has taken a toll on his business, as well.

"Obviously, buyers are thinking twice about where they can spend their money, whether it's on the down payment for equipment or whether it's in their fuel tank," Soika said.

Infrastructure damage. A major long-range effect of the storm, Basset said, is the fact that the transportation industry must come to grips with the destruction of the port of New Orleans.

"The port is going to need to be rebuilt because of its access to the Mississippi River," he said. "The port is an ... important gateway into the country."

As a result of the fuel shortage and the need to transport and deliver relief supplies in a timely manner, the Federal Motor Carrier Safety Administration has invoked a Declaration of Regional Emergency for the states affected by the storm.

James Lewis, spokesman for the administration, said the declaration is invoked automatically when a state declares a state of emergency. The states that fall under the umbrella of the declaration for the region include Tennessee, Mississippi, Alabama, Arkansas, Florida, Texas and Louisiana.

More time on the road. The declaration eases the hours-of-service requirement for truckers carrying fuel and relief supplies. Truckers are urged to coordinate their activities with state and federal agencies, Lewis said. And with longer hours now possible, he added, drivers are urged to exercise caution.

Lewis said if a trucker is tired, he should pull over and rest.

"It is vitally important to be safe," Lewis said. "We don't want to compound the tragedy any further."

According to the administration's Web site, www.fmcsa.dot.gov, the declaration easing the hours-of-service requirement expires today. Lewis said the agency, which is responsible for the issuance, administration and enforcement of safety regulations, chose to lift travel-hour restrictions following the disaster because of the obvious need for supplies and equipment to aid the relief effort.

Keeping supplies moving. The concept of public safety shifts during a state of emergency, he said, adding that during a high-risk situation, it becomes necessary to weigh priorities and act accordingly.

"The whole point is to make sure that supply lines keep moving," Lewis said.

PROPERTY SALES 0 70 16,267
MORTGAGES 0 30 10,117