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Moving Companies suffer from high fuel prices

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By moving101


Routine drivers who grimace whenever refueling their vehicles are not the only ones who feel the pain at gas pumps. Over the past year, almost 3,000 gas stations have closed up shop, says the oil-industry trade publication NPN magazine, since many people have cut down on their driving. Whenever they get more gas, they will skip conveniently placed stations and head for stations that have better prices, thereby causing the smaller, more independent gas stations to close up for good. The worst casualties of skyrocketing fuel prices, though, spread across many industries, leading to tough times for businesses, customers, and even the nonprofits serving local communities. Nowhere is this more evident than among people in the transportation industry, such as movers and truck drivers, who must use high-priced diesel-now at a cost of $4.80 per gallon, average. "Look at how fast we got here," comments Bob Costello, chief economist of the American Trucking Association. "We were caught off guard, and now some will have to close up shop."

Rising Operational Costs

The price of driving moving trucks for long distance moving companies has almost doubled over the past couple of years to $1.40 per mile, up from 80 cents, due to rising diesel prices, according to Dan Klein, president of the newly formed National Moving Contractors Association, a group that represents independent movers. Although movers may pass the higher gas costs along to the customers, they must bear the cost of driving "deadhead"-with an empty load-until they pick up the next load. "The deadhead is what's really hurting us," notes Klein. The trucking association experienced a thousand fleets going out of business in the first quarter, 2008. The fleets represented 40,000 trucks; some will be bought by other trucking companies at slashed prices, comments Costello. "Some truckers are leaving companies, and those companies are getting rid of the truck and not replacing the trucker." Moving people, as opposed to objects, is no less difficult as a business. The cost of driving taxis now is 38% higher than in 2006, when gas was about $2.91 per gallon. This slashes drivers' net income by $3,825 in 2008, says the Taxicab, Limousine & Paratransit Association, which represents 125,000 active drivers of those vehicles, as well as executive sedans, airport shuttles, and more.

Charities Hurting

The effect of skyrocketing fuel prices has brought on pain as well to volunteer programs. Many of them had set up their 2008 budgets in the prior year, and then found themselves unready to deal with the unexpected but drastic rise in gas and diesel costs. 58.3% of Meals on Wheels programs, which bring food to house-bound seniors, have lost volunteer drivers because of higher gas costs; the volunteers must pay for their own gas. Things could worsen for anyone who relies on local charity and volunteer organizations. "I heard a report of a [volunteer] fire department that shut down in New Jersey because of higher gas prices," remarks David Finger, director of government relations for the National Volunteer Firefighter Council. "I wouldn't be surprised if there's more than one out there who are in the same situation." While Finger does not think there will be widespread shutdowns, the trouble, he says, is that volunteers will become much pickier about where they will serve. The council sees some volunteer firefighters responding to far fewer emergency calls, particularly those that are more than 20 miles away from where they live. Moreover, to save fuel, these volunteers might not be so fast to roll out every truck that they normally would on each call, Finger notes.

How has $4 gasoline harmed your lifestyle or business? Share the experience in Comments section below. Like those who drive every day, the main factor for both volunteer groups and businesses is to seek ways to reduce fuel consumption. Costellos says that truck drivers and car shipping companies, for instance, can equip cabs with devices which let the air conditioning run off of auxiliary power units while the driver sleeps. Another gadget keeps the driver's speed at a certain limit to obtain optimum mileage (fuel economy will drop above certain speeds, according to the vehicle). Still, these handy tips can go only so far. "We can't cut down on driving when your business is driving other people's freight," frets Costello. "We're not out there joyriding. We are still spending a heck of a lot of money on fuel costs."

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