Businesses Are Feeling the Pain of High Diesel Prices

SOUND UP: rolling truck…..

Dozens of tractor trailers a day pull in and out of the Associated Grocers warehouse in Pembroke.

And nearly every one of them runs on diesel.

Steve Creed, Associated Grocers vice president has an office with a window that overlooks the truck docks.

While sitting in front of the window, Creed did a little math to figure out how much his weekly fuel cost has risen.

When you look back to last year at about the same time I believe we’re at about a buck a gallon higher than we were a year ago. So, ten thousand gallons, a buck a gallon is ten thousand bucks more.

That’s 10,000 dollars a week more….or a little more than half million dollars a year.

Associated Grocers runs trucks into every state of New England and parts of New York six days a week.

Steve Creed says the diesel situation has forced the company to tack the higher fuel costs on to what the company charges grocery stores.

We like others have a fuel surcharge that we pass on to our customers. However, what we’ve tried to do is minimize the impact to our customers and not raise that surcharge, even when we should have….as our policy runs. So, we’re kind of eating up a good share of that cost right now and trying to hold back and see what’s going to play out in the marketplace.

Associated Grocers is a pretty big company, with more than 300 employees.

But many smaller firms are having trouble absorbing higher diesel prices.

Jack Bronnenberg and his son have a 2 man logging company based in Strafford.

He says he has logging equipment that burns more than 50 gallons of diesel a day.

Bronnenberg says the higher cost is making it so his business is barely breaking even.

We’re right on the edge now. If our fuel goes to 4 dollars a gallon…on road diesel fuel goes to 4 dollars a gallon there’s going to be a lot the trucking companies are going to be dropping like flies. ‘Cause we just can’t in our business we just can’t charge a fuel surcharge. ….there’s not a place to absorb it.

Most trucking companies make money by simply hauling freight from one place to another.

And they too, are quite dependent on diesel fuel.

Robert Sculley heads New Hampshire’s Motor Transport Association in Concord.

Sculley says his members have been complaining.

There was a meeting of truckers two weeks ago on a Saturday. Quite a few of them sat down there and said well they’re going to have to park their trucks if you know something can’t be done about it but the real issue is what can be done about it? I mean, they can only pass on so much and it hurts the little guys the most I mean the single truck owners this is a greater burden than those that have more vehicles to operate but it hurts them all the same….

The cost of diesel is, of course, tied to the cost of a barrel of crude oil.

A few weeks ago, the price of a barrel hit one hundred dollars.

Since then, the price has slid back some.

But it will have to slide a long way to bring the price of diesel down to a more comfortable level for many businesses.