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Tuesday, April 01, 2008

Oil is down from $110 to $101 But the Damage to Trucking is Done

As I write this article, Oil company executives are working to defend their $18 Billion tax breaks that they already receive and that add to their $120 billion cumulative profits over the last 12 months.

Meanwhile freight, trucking firms and truck drivers are bleeding out from Diesel prices in the $4 a gallon range.  We covered this problem 2 weeks ago when loads stopped shipping that didn't pay more than $2 per mile.

Distribution Business Articles: Just-in-Time is Just Breaking Under $4 / Gallon Diesel - $110 / Barrel Oil

Things have only gotten worse for trucking firms as you can see from this report

Now things might spill out in something that is akin to the truckers protest strike of a few years back.  The difference is that back then, the strike was symbolic mostly as it only lasted about a day, like a job walk off.

This time around many truck drivers and trucking firms are being forced to stop work because they literally cannot keep their trucks or drivers on the road with fuel prices at record highs.

2 Reasons Why Higher Prices Are on the Horizon

Plus, things look like they will likely get worse with fuel prices soon

  • The Iraqi Government lost a key battle over control of Basra the key oil producing city in Iraq
  • Farmers will plant less corn this year as they rotate crops to protect their fields in partial reaction to higher fertilizer prices - that means less ethanol

So while the tanned faces of oil executives fresh off of their luxury vacations to the islands adorns capital hill, most Americans are buckling down and buckling under the prices they see at the pumps.