Surging Diesel Prices Fuel Truck Drivers’ Discontent

It’s no wonder independent truckers are mad. With diesel prices soaring to record levels, it almost makes more sense to park a big rig than to drive one.

Lorenzo Modesto is one of the drivers getting squeezed. His fuel costs have jumped nearly 40% since the start of the year, but his pay hasn’t budged.

Modesto, who has owned and driven his own rig for 22 years, mostly carries freight on short trips from the ports of Los Angeles and Long Beach to nearby distribution centers or rail yards.

“I love my profession, but I’m not making it anymore,” he said. “I had to send my wife to work in order to survive. I’ve got to cut things like trips to the movies or sending my son to the university.”

On Friday, Modesto and hundreds of his fellow independent truckers showed their growing frustration in dramatic fashion.

It began at the height of the morning commute when several drivers traveling through the City of Commerce parked their tractor-trailers on Interstate 5, snarling traffic for about three hours before authorities towed the trucks away. The drivers were arrested. Later in the day, Modesto and other truckers protested on foot in Wilmington, prompting freight movement to slow to crawl at the nearby port complex. A similar protest took place Friday at the Port of Oakland.

For now, the protests are limited to California, and it’s unclear how long they will last. But with high diesel prices now a nationwide problem, industry experts say the unrest could easily spread, raising the specter of massive disruptions in the flow of goods nationwide.

Friday’s protests highlight the plight of workers who have spent years on the brink of failure, forced to absorb rising insurance and maintenance costs while shippers -- who have had the upper hand since deregulation hit the industry in 1980 -- drive down their pay.

Modesto recalled earning $180 for a round trip to Commerce 15 years ago. That same route pays just $110 today, despite increases in maintenance, insurance, taxes, registration, and worst of all, diesel.

“Fifteen years ago I used to make $60,000 to $70,000 a year,” he said. “Now I make $38,000 to $40,000, and that’s with a lot of 12-hour days.”

With rising fuel costs pushing many independent owner-operators into insolvency, one trucker trade group is pressing for federally mandated fuel surcharges to alleviate the problem.

“Trucks are repossessed when you can’t make the payments, and you can’t make the payments if you can’t pay for fuel,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Assn. After a similarly dramatic jump in diesel prices in 2000, more than 220,000 drivers across the U.S. lost their rigs, he said.

Retail diesel prices are at record levels nationwide, but they’re highest in California, where the cost of diesel peaked at an average $2.26 a gallon on April 19, up nearly 59 cents, or 35%, since early January. Prices have since inched down to $2.247, according to a weekly federal survey.

Experts say the diesel market in California suffers from many of the same characteristics that sometimes cause gasoline prices to gyrate wildly: not enough refineries making fuel to cover the needs of the state, especially as demand continues to grow.

“It’s hurting a little more than usual, so everybody’s angry,” said John Ficker, president of the National Industrial Transportation League, a group that represents shippers.

Some trucking firms try to make shippers pay a fuel surcharge to offset some of the price increases. Few have the market sway to do that, however, and those that do often pass along a small percentage of the fee to the drivers paying the fuel bill.

The problem is particularly acute among short-haul drivers who typically shuttle containers of freight short distances between ports and major transportation centers.

“That is the bottom of the bottom in trucking,” Spencer said. “It’s basically all immigrants. The system has dealt them a bad hand to begin with, but they are basically exploited at every opportunity by the people they haul for.”

In many cases, truckers and others say, port drivers haul goods for an intermediary that contracts with department stores, grocers or other shippers. While the drivers own their own trucks and are considered independent operators, they typically work for a company that pays for the necessary insurance and permits and then charges the drivers fees for those items.

The worst among them charges drivers fees that are above the actual cost for the insurance, truckers and others say. In addition, these drivers pay for their own fuel.

Port drivers once earned solid, union wages, but the industry changed dramatically after trucking was deregulated in 1980, opening the door to competition from start-up trucking firms. Shipping lines rewarded the lowest price, and rates dropped quickly. Some 9,000 truck drivers, organized through several hundred firms, now compete for work at the ports.

“Everybody knows the rates should be higher,” said the manager of a mid-size trucking company in Southern California, who spoke on condition that his name not be used, “but the newer truckers are always willing to do it for less.”

And that leaves drivers like Hernan Robleto struggling with numbers that don’t add up.

Robleto, a port driver for 30 years who idled his truck to attend Friday’s protest in Wilmington, said he recently earned $160 for a half-day’s work. Out of that, $30 went to insurance, $60 to fuel and an additional $30 to $40 for truck maintenance. “So that leaves me with what, $30 for profit? Who can live like that?”