Thursday, March 13, 2008

Flirting with $4 a gallon

Portland Press Herald

From truckers to loggers, Mainers for whom the pricey fuel is a business expense are feeling the squeeze.

By ANN S. KIM, Staff Writer
March 13, 2008

KENNEBUNK — Ferhat Durakovic filled his tractor-trailer with diesel and watched as the numbers ticked upward.

"Oh, boy, that's crazy," said Durakovic, an independent trucker based in Manchester, N.H.

He stopped pumping just shy of 36 gallons, which cost him $140.01 at $3.89 a gallon. With the diesel he already had in the tank, he figured he had enough to get him to New Jersey, where he hoped to find cheaper fuel.

Truckers who stopped at the Maine Turnpike's Kennebunk rest stop Wednesday said they can improve their mileage by slowing down, idling less and being vigilant about keeping their trucks in top working condition, but there is little else they can do to deal with sky-high diesel prices that are squeezing their profits.

"Of course, I make less money," said Durakovic, who was picking up water in Hollis to deliver to Pennsylvania. "What can I do – return the truck to the bank?"

Diesel prices hit a record high on Wednesday, causing additional distress for truckers and others who have been trying to cope with the rising price. The national average reached $3.88 a gallon, up $1.14 from a year ago, according to AAA. The average price in Maine was even higher, at $3.99 a gallon, up from $2.75 at this time last year.

Demand in Europe and a weak U.S. dollar are two of the factors driving prices up, said Pat Moody, a spokesman for AAA of Northern New England.

"It's cheaper to buy diesel overseas because their currency is a little stronger than it usually is, compared to the U.S. dollar, in which all gas and oil is traded in on a worldwide market," he said.

Diesel costs are hitting other industries and consumers, who will see the effects reflected in more expensive goods.

Loggers, who rely on diesel-powered off-road equipment like saws, excavators and skidders, have been dealt a devastating blow, said Sandra Brawders, executive director of Professional Logging Contractors of Maine.

When mud season ends, many loggers will not be able to resume operations, she said.

"I'd be very surprised if we don't lose a quarter of our logging capacity because of the diesel prices," she said.

A snowy winter and increased diesel costs have strained snow-removal budgets in communities like Westbrook. The city spent $51,954 on diesel through Feb. 15, consuming 17,910 gallons at an average price of $2.90 a gallon, said City Administrator Jerre Bryant.

For the same period last year, the city spent $15,345 for 8,014 gallons at an average price of $1.92 a gallon, he said.

While the city planned for higher diesel prices, there's less room in the budget because of other fuel-related costs, like heating, Bryant said.

"This is an expensive year, all around," he said.

Public transportation providers like train and bus lines are spending more on diesel, but those costs could be offset by increased ridership as passengers cope with the rising cost of driving their cars.

Some fares for Amtrak's Downeaster service were increased $1 this week because of higher diesel prices. A one-way trip from Portland to Boston, without any discounts, now costs $24.

Ridership was 35,509 in February, 36 percent more than a year ago, according to Patricia Quinn, executive director of the Northern New England Passenger Rail Authority.

"More and more people are finding it's more expensive to drive," she said.

Concord Coach Lines started seeing more passengers when gas prices headed toward $3 a gallon, said Harry Blunt, owner of the bus service. Meanwhile, fuel costs were up nearly 35 percent in January from a year before, he said.

"You can't make that up in a month," he said.

Larry Sidelinger, owner of Yankee Pride Transport in Damariscotta, blames high prices, in part, on Maine's diesel tax of 28.8 cents per gallon.

He is part of the Coalition for Lowering Fuel Prices in Maine, which is pushing for a 90-day moratorium on the tax.

Owner-operators are the hardest hit in the trucking industry, partly because they are less able to negotiate prices, said Dale Hanington, president and chief executive officer of the Maine Motor Transport Association. Even those who can negotiate can't keep up with prices that go up daily, he said.

Consumers haven't necessarily seen the full effect of increased transportation costs on the price of goods because not all of the additional costs have been passed along, and the biggest spike in diesel prices has come in recent weeks, Hanington said.

"Usually, the price differential is something that sneaks up on you, rather than all of a sudden milk's up a dollar a gallon," he said. "Any consumer commodity that's going to be moved around by truck or rail is actually going to go up."

In Kennebunk, Mike Guilfoil, a trucker based in Franklin, Mass., said he was trying to squeeze 6 miles per gallon, rather than the usual six, from his truck but was pessimistic about the prospects for his business.

"I'll be lucky if I make it to the end of the month," he said.

Jason Macchi, who was returning to St. Albans after dropping off a load of potatoes in Connecticut, said he was doing what he could to save a few cents here and there.

"Hopefully, at the end of the year, it adds up," he said.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

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