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My Trucker Relief Plan

Veramocor

Senior member
Mar 2, 2004
390
1
0
There have been a lot of stories recently on how high diesel prices are hurting truckers. Truckers Woes The high prices especially effect independent drivers who do not have long term purchasing agreements.

Some truckers have suggested eliminating the diesel fuel tax for truckers. This idea has problems because it would leave a deficit in the transportation budget, its a one time fix (unless you want to start subsidizing diesel), and it would advantage non-truckers who use diesel.

I suggest a three part plan, however only part 1 is needed for an immediate effect:

1. Offer 50% tax credits for truck fuel efficiency upgrades. Tire auto-inflate, Aluminum wheel set, and truck aerodynamic upgrades would save the average trucker 8.6% in diesel. EPA fuel efficiency upgrades

Using the typical values of 18,000 gallons per year and 4 dollars a gallon a trucker spends $6,000 per month on diesel. These three improvements would save $516 dollar per month. The cost of the improvements $6,300 or a ROI of 12 months, the tax credits bring it down to 6 months return.

Alternatively only removing the federal diesel tax would save truckers 24 cents a gallon or 360 dollars. I'd note that the gas savings of $516 a month - ($3150/ 12) = $254 dollars savings per month slightly less savings for a trucker for one year but much more for a lifetime of the truck. The cost to the government on the other hand is $262. a month per trucker (3150/12) for one year versus $362 a year permanently by getting rid of the tax.

Further, the decrease in fuel consumption will lead to lower diesel prices for all (diesel and gasoline consumption is highly inelastic a drop of 8% fuel use per trucker would significantly alter the demand side of the equation)

There should also be a credit for heaters and/or APU which would eliminate wasteful idling (and simultaneously improve air quality). An APU can save an additional 8% in diesel fuel.

Also a one-two year federal guaranteed government loan, very low interest, may be appropriate

2. Increase the DOE budget for hydraulic hybrids. Batteries just won't work for big-rigs, the best chance is hydraulic hybrids, in local driving conditions it is estimated this could save 20-30% fuel.

3. Diesel prices are high in the winter compared to gas prices which are high in the summer. The reason, competition for the fuel. Diesel and household heating oil are very similar in composition. In the winter the northeast demands high amount of fuel oil. At a minimum there should be a concerted Federal effort/assistance to switch to high efficiency natural gas (90-96% AFUE), or even better, heat pumps (geothermal or new special designed air source heat pumps for cold climates).

U.S. consumption Diesel Fuel 4.1 Million Barrels

Northeast heating oil consumption: ~130,000 barrels per day; A conversion savings of 3% fuel which can then be used for transportation.

This conversion would also help switch the Northeast to a lower cost/more local alternative of natural gas or generated electricity.

Government study on converting Northeast to natural gas

Best regards


 

charrison

Lifer
Oct 13, 1999
17,033
1
81
1. Those are good idea, but probably the quickest paybacks are going to be super single tires as they increase fuel economy 3% without a major retrofit. Also adding a small generator to power the rigs instead of keeping them from idling all the time. Also trucks and truckstops need to be setup to rigs can be plugged in while they are stopped.

2. Peterbilt is starting prodution of electric and hydraulic hybrids now, so there is no real need for more funding.

3. Heating oil is slowly going away as a home fuel. Homes in the north are probably better of using dual fuel(heat pump/nat gas or oil) system.

But the real answer to trucking is to get more trucks of the road and more cargo onto rail. Trucks are more flexible and somewhat faster, but rail uses much less diesel to transport containers. This is already happening, but it takes alot of time to update rail to carry containers.
 

JS80

Lifer
Oct 24, 2005
26,297
4
81
Oil is up 60% and you guys are talking about tax credits for truckers to spend money on something that gets them 8% more efficiency?

I would place a temporary 90% special tax on speculative futures trading gains on oil.
 

Mxylplyx

Diamond Member
Mar 21, 2007
4,197
100
106
Originally posted by: JS80
Oil is up 60% and you guys are talking about tax credits for truckers to spend money on something that gets them 8% more efficiency?

I would place a temporary 90% special tax on speculative futures trading gains on oil.
While a 90% tax might be rather extreme, I am on the same page as you. The government needs to find a way to drop a poision pill of sorts in the oil commodity market, and make it much less attractive as an investment. Perhaps they can manipulate the market with the oil reserves...who knows.
 

brxndxn

Diamond Member
Apr 3, 2001
8,475
0
76
Fuck the truckers.. they pay $10,000 taxes/year and act like it's a big deal while their trucks do $100k/year damage to the roads.. and we subsidize it.

We need more trains... still the most efficient way to ship goods.
 

Veramocor

Senior member
Mar 2, 2004
390
1
0
Originally posted by: Mxylplyx
Originally posted by: JS80
Oil is up 60% and you guys are talking about tax credits for truckers to spend money on something that gets them 8% more efficiency?

I would place a temporary 90% special tax on speculative futures trading gains on oil.
While a 90% tax might be rather extreme, I am on the same page as you. The government needs to find a way to drop a poision pill of sorts in the oil commodity market, and make it much less attractive as an investment. Perhaps they can manipulate the market with the oil reserves...who knows.
speculation? Thats like the tail wagging the dog.

If you want to know where high prices are coming from try the weakening dollar, increased demand from chindia, and flat world wide production for the last few years.
 

compman25

Diamond Member
Jan 12, 2006
3,771
2
81
Originally posted by: brxndxn
Fuck the truckers.. they pay $10,000 taxes/year and act like it's a big deal while their trucks do $100k/year damage to the roads.. and we subsidize it.

We need more trains... still the most efficient way to ship goods.
You are a ****. I paid more than that in taxes each year, we have to pay more than just fuel tax, there's Heavy Use Tax paid to the IRS each year, state fuel taxes paid to each state you drive through, not just the one you buy fuel in, and lots of others. And how do you subsidize it yet the truck drivers don't? And what was subsidized for me when I owned my truck? Trains may be more efficient, but companies like their merchandise in a timely fashion, trains aren't going to do that. All you have to do is look where Wal-Mart builds their distribution centers, if trains were a more economical solution you know they would be building next to rail yards. But guess what? They don't.
 

lupi

Lifer
Apr 8, 2001
32,542
260
126
Originally posted by: charrison
1. Those are good idea, but probably the quickest paybacks are going to be super single tires as they increase fuel economy 3% without a major retrofit. Also adding a small generator to power the rigs instead of keeping them from idling all the time. Also trucks and truckstops need to be setup to rigs can be plugged in while they are stopped.

2. Peterbilt is starting prodution of electric and hydraulic hybrids now, so there is no real need for more funding.

3. Heating oil is slowly going away as a home fuel. Homes in the north are probably better of using dual fuel(heat pump/nat gas or oil) system.

But the real answer to trucking is to get more trucks of the road and more cargo onto rail. Trucks are more flexible and somewhat faster, but rail uses much less diesel to transport containers. This is already happening, but it takes alot of time to update rail to carry containers.
I live in an area with a lot of norfolk southern operations, and they have a lot of track abandoned in place. I don't think we'll ever see trains used for much in consumer goods transport as they used to.
 

PokerGuy

Lifer
Jul 2, 2005
13,652
199
101
I'm not quite sure why there has to be any kind of "relief plan". Wouldn't the marketplace regulate itself in this regard? If the cost of doing business for the truckers rises, then they pass that cost along, or get out of the business. When they get out of the business, there is less supply, and if demand outstrips supply, then the prices get pushed up.

The free market should take care of the problem. Am I missing something?
 

Thump553

Lifer
Jun 2, 2000
11,845
1,167
126
I've been studying the trucking industry for personal reasons the last few months, so this thread really intrigues me. I think that the ideas posed by Veramocor (original poster) as supplemented by charrison's comments, have some real value. Some additional comments:

-I am still at a total loss as to why diesel is so high. Here in the Northeast fuel oil has been the dominant heating source for decades, and until fairly recently diesel was always cheaper than gas, summer or winter. Now it is almost a dollar more per gallon (heating oil is up in this range, too, and there are no highway taxes on that). It has to be cheaper to refine diesel or heating oil than gas. In recent decades the cost of refining gas has gone up substantially, with first switching to no-lead, then such things as winter (ethanol) blends, MTBE, etc. Incidentally here in the northeast in recent years diesel is higher than gas summer or winter. In theory gas comes down in spring when they switch off winter blend, but not recently (maybe the price increases slow down for a week or two).

-I love natural gas as a heating fuel, had it at my parents house and when I lived in the midwest. It's a lot cheaper than oil, and tons cleaner. With an oil furnace you should have it tuned up each year at $100+ a pop, with natural gas you can go for years without maintenance. But due to our rocky soil and lots of ledge, the cost of gas pipelines is prohibitive for huge chunks of New England. Heat pumps are too inefficient to be much good here. Frankly that is why you see lots of us New England country folk with wood stoves.

--I'm not familiar with what hydralic hybrids are and would love more info. I've often thought that some sort of alternative power system is the long term solution for trucking. Bulk, weight, complexity and styling concerns are of far less concern there than with cars.

-Contrary to popular belief, freight rail is coming back strong. For bulk long haul it's definately the cheapest. It will never come close to totally replacing 18 wheelers-our industry (sources and destinations) are too spread out from rail lines and there are some things-like produce-that require the speed of trucking. But intermodel (ship the trailers by trains to hubs, then switch them to trucks for the final portion of the trip) is growing fast.

-Truckers have lots of financial problems, many of them made worse by governmental policies. Minimal wage and overtime laws don't apply to interstate truckers, and NAFTA is going to bring in a lot of Mexcian truckers once the litigation barriers are down (if GWB and his cronies have their way). These days you pay $2500-7000+ for schooling to get a truck license, to work in a job with 11 hour days, 70 hour weeks, live in the equivalent of a prison cell for 3-4 weeks at a shot, all for maybe $30k a year starting (up to 40-50K later).

-Truck companies are already dialing back the speed governors on their trucks, especially the megacarriers, many of which have them set at 62 mph or lower. Since company drivers get paid by the mile, this directly affects company drivers' income to the worse.

-Another thing I have not understood it that the trucking industry as a whole, is one of the brightest, if not the brightest industry sector on Wall Street in 2008. Their stock prices are gaining rapidly while the markets as a whole are declining. Whether this has to do with the hidden governmental subsidies of the mega-carriers is something I haven't been able to pin down yet.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
The big question would be "Do we have enought natural gas supply to convert everyone over to natural gas?" Then would there be help for consumers that want to make the switch. Some people may have made a large investment in a fuel oil furnace that they can not afford to write off. We could be shooting ourself in the foot if we raise the price of natural gas to the rest of the country.
 

brandonb

Diamond Member
Oct 17, 2006
3,731
2
0
Originally posted by: brxndxn

We need more trains... still the most efficient way to ship goods.
:thumbsup:

http://www.uprr.com/newsinfo/r...428_fuel_economy.shtml

Who cares how long it takes. If it takes 2 weeks to get a product from a port to a store on Truck and 3 weeks with train, what difference does that make to me? I'd rather have the truckers off the road (congestion) and using the method which is 3 times more effecient and uses alot less pollution to get the product to the store.
 

Darwin333

Lifer
Dec 11, 2006
19,947
2,325
126
Originally posted by: brandonb
Originally posted by: brxndxn

We need more trains... still the most efficient way to ship goods.
:thumbsup:

http://www.uprr.com/newsinfo/r...428_fuel_economy.shtml

Who cares how long it takes. If it takes 2 weeks to get a product from a port to a store on Truck and 3 weeks with train, what difference does that make to me? I'd rather have the truckers off the road (congestion) and using the method which is 3 times more effecient and uses alot less pollution to get the product to the store.
The retailer and the consumer who are ultimately paying for the goods.
 

compman25

Diamond Member
Jan 12, 2006
3,771
2
81
Originally posted by: brandonb
Originally posted by: brxndxn

We need more trains... still the most efficient way to ship goods.
:thumbsup:

http://www.uprr.com/newsinfo/r...428_fuel_economy.shtml

Who cares how long it takes. If it takes 2 weeks to get a product from a port to a store on Truck and 3 weeks with train, what difference does that make to me? I'd rather have the truckers off the road (congestion) and using the method which is 3 times more effecient and uses alot less pollution to get the product to the store.
2 weeks?, 3 weeks? Dream on. A team truck will do coast to coast in 2.5 days. Companies today use JIT (Just in time) procedures for their warehousing and stocking.
 

Genx87

Lifer
Apr 8, 2002
41,086
493
126
I dont enough about the industry but wouldnt the cost of hauling the cargo be passed onto whoever put the contract out and then passed onto consumers?
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,365
5,369
126
The cost of the improvements $6,300 or a ROI of 12 months
why do we need to subsidize something with such a short ROI anyway? for rigs lasting a couple decades or more that's such a no-brainer that i'm almost shocked people are asking for a handout to do it.


as for what was subsidized for truckers: the interstate highway system and about a billion regulations on trains (granted, trains were subsidized back in the 1800s).


i'm in favor of a modern train transport system across the country, but i doubt it'll get done. way too much land will have to be condemned to straighten out the rail lines, and the teamsters will oppose it at every step.



Originally posted by: Genx87
I dont enough about the industry but wouldnt the cost of hauling the cargo be passed onto whoever put the contract out and then passed onto consumers?
who pays for it is determined by the slope of the supply and demand curves.
 

Dman877

Platinum Member
Jan 15, 2004
2,710
0
0
Is anyone familiar with trucking in Europe? I'm not but when I was over there, I noticed all of their commercial trucks are very odd-looking and quite a bit smaller than they are here. Maybe we should take a page from their book since they've been paying a lot for fuel for a long time?

I'm down with the trains thing too.
 

Jaskalas

Lifer
Jun 23, 2004
29,928
3,446
126
Originally posted by: JS80
Oil is up 60% and you guys are talking about tax credits for truckers to spend money on something that gets them 8% more efficiency?
I couldn't help but think the same thing. How long until the price of oil is above the 8% savings? I doubt we could even implement the plan before it is up another 10-20% thereby negating the savings.

The real answer is not a nice one, but it is the ONLY answer. To accommodate fuel prices, the trucking companies must simply charge more money to ship goods. The price of everything in our stores will rise and every American will pay for it.
 

JS80

Lifer
Oct 24, 2005
26,297
4
81
Originally posted by: Jaskalas
Originally posted by: JS80
Oil is up 60% and you guys are talking about tax credits for truckers to spend money on something that gets them 8% more efficiency?
I couldn't help but think the same thing. How long until the price of oil is above the 8% savings? I doubt we could even implement the plan before it is up another 10-20% thereby negating the savings.

The real answer is not a nice one, but it is the ONLY answer. To accommodate fuel prices, the trucking companies must simply charge more money to ship goods. The price of everything in our stores will rise and every American will pay for it.
Are trucking prices regulated? If so, what are the terms?
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,365
5,369
126
very small changes in the supply and demand of oil have, traditionally, resulted in large swings of the price of a barrel. remember back when oil was about $15 a barrel in 199-99? single digit oversupply (and a very low single digit, iirc). so, small changes in efficiency could result in very large price reductions when aggregated.
 

Arkaign

Lifer
Oct 27, 2006
20,565
1,050
126
Federalize energy. It works for the military, so should it for energy. After all, it's a matter of national security of the highest caliber.

We're so vulnerable right now, that a sudden or sustained huge increase in energy prices can literally destroy our economy wholesale.
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Originally posted by: compman25
Originally posted by: brandonb
Originally posted by: brxndxn

We need more trains... still the most efficient way to ship goods.
:thumbsup:

http://www.uprr.com/newsinfo/r...428_fuel_economy.shtml

Who cares how long it takes. If it takes 2 weeks to get a product from a port to a store on Truck and 3 weeks with train, what difference does that make to me? I'd rather have the truckers off the road (congestion) and using the method which is 3 times more effecient and uses alot less pollution to get the product to the store.
2 weeks?, 3 weeks? Dream on. A team truck will do coast to coast in 2.5 days. Companies today use JIT (Just in time) procedures for their warehousing and stocking.
Yes but companies can account for latency with rail, just as easily as they can a truck. A train will never beat a 2 man truck, but a 2 man truck is about as expensive as it gets to ship something. Rail is slower, but not slow enough to cause problems for the most part.


Rail is going to be taking more freight away from trucks in the coming years.
linkage
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Thump,

You need to remember heat pump are only inefficient when the temp drops below say 30F. While winters maybe get cold, there are plenty of times during the year when a heatpump can be usefull. And if you are going to have an AC, you might as well have a heatpump.

But of course you will still need gas/oil heater to back up a heat pump system for when it does stay cold.
 

dmcowen674

No Lifer
Oct 13, 1999
54,912
46
91
www.alienbabeltech.com
Originally posted by: Arkaign
Federalize energy. It works for the military, so should it for energy. After all, it's a matter of national security of the highest caliber.

We're so vulnerable right now, that a sudden or sustained huge increase in energy prices can literally destroy our economy wholesale.
It must be destroyed to be saved.
 

dmcowen674

No Lifer
Oct 13, 1999
54,912
46
91
www.alienbabeltech.com
Originally posted by: Thump553
I've been studying the trucking industry for personal reasons the last few months, so this thread really intrigues me. I think that the ideas posed by Veramocor (original poster) as supplemented by charrison's comments, have some real value. Some additional comments:

-I am still at a total loss as to why diesel is so high. Here in the Northeast fuel oil has been the dominant heating source for decades, and until fairly recently diesel was always cheaper than gas, summer or winter. Now it is almost a dollar more per gallon (heating oil is up in this range, too, and there are no highway taxes on that). It has to be cheaper to refine diesel or heating oil than gas. In recent decades the cost of refining gas has gone up substantially, with first switching to no-lead, then such things as winter (ethanol) blends, MTBE, etc. Incidentally here in the northeast in recent years diesel is higher than gas summer or winter. In theory gas comes down in spring when they switch off winter blend, but not recently (maybe the price increases slow down for a week or two).
"-I am still at a total loss as to why diesel is so high."

It's a crock and the truckers know it.

I hope they cripple the country and the everyone of the oil loving company faithful.

Diesel is one of the first by-products when cracking oil.
 

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