The Demise of Taggart Transcontinental

Posted by $ blarman 9 years, 10 months ago to Economics
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While the article focuses more on truck transportation than rail, the transportation crunch throughout the country is being felt. One major factor they failed to include in these calculations, however, is probably more important than the driver crunch: the cost of fuel.

I used to work for a transportation company, and I can tell you that in the transition from President Bush to President Obama, we saw our costs shift significantly, from being mainly employee costs to being mainly fuel costs. Where that comes into play in the open market is that the independent drivers have simply hung up their hats: they can't afford to pay pump prices and compete with the larger firms who can lock in bulk fuel prices - thus the shortage of drivers. When you are driving 1000 miles in a vehicle that gets 5 MPG, the difference between paying $3.40 and $3.50 = .10/gal * 1000 miles / 5 MPG = $20. Considering that a common driver makes $20/hr loaded wage and probably gets one or two trips per week like that, you can see how that can quickly make or break an independent operator.
SOURCE URL: https://www.bmoharris.com/us/commercial/perspectives/june2014/index.html


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  • Posted by $ jbrenner 9 years, 10 months ago
    Your argument explains why CSX has been one of the most profitable companies over the last few years. Trains carry more with fewer workers.
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  • Posted by SolitudeIsBliss 9 years, 9 months ago
    And don't forget all the additional costs of Training, Regulatons, etc. Businesses and trucking companies are being bombarded with so many new requirements for changing documentation, training, updated and changing regulations it seems these days that's all we do is try to keep up with new govt. demands.
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