Transport firms have no choice but to pass fuel costs on: CTA

OTTAWA — The Canadian Trucking Alliance is citing a recent surge in diesel prices to fuel its argument for mandatory speed limiters on all trucks in the country.

Skyrocketing fuel prices have the trucking industry aggressively trying to maximize fuel efficiency wherever possible, says CTA CEO David Bradley. That’s why, argues the association leader, speed limiters would be welcome by many carriers looking to save fuel and mitigate rising costs.

Diesel fuel used by truckers has increased in price by 21 percent over the past ten weeks and is up 27 percent year-over-year, CTA point out, which points out a typical truck tractor holds 900 litres of diesel fuel, and is likely to fill up around 85 times per year. That translates to about $610 each time a truck is filled up, or approximately $52,000 per year (based on the rack price of diesel fuel), according to CTA.

CTA says industry is looking for ways to curb
fuel use, but gov’t policies don’t help

With diesel as the second largest operating cost for trucking companies, the impact on the industry is enormous, says Bradley.

While carriers are trying to do their part in conserving fuel, Bradley urged the government to do more. “We are calling upon the federal government to renew and improve the Natural Resources Canada rebate program for the purchase of auxiliary power units to reduce engine idling; and we want all the provincial governments to agree to weight allowances for the installation of anti-idling and anti-emissions devices so payload is not impaired.”

However, warned Bradley, new truck diesel fuel and engine emission standards that come into effect later this year could work against industry fuel efficiency efforts.

“The industry is caught between a rock and a hard place,” he says. “This fall we will see the introduction of ultra low sulphur diesel fuel (the sulphur content of truck diesel will drop from the current allowable level of 500 ppm to 15 ppm) and a new generation of smog-free truck engines. This is great news in terms of cleaner air, but the new fuel has a lower energy content than existing diesel fuel and the new truck engines, while cleaner, are expected to be up to 5 percent less fuel efficient than current engines. We have to try and make that up somehow.”

Like every other business, trucking will have to pass on its increased costs along to customers through fuel surcharges, rate increases, or a combination of both, says Bradley.

Fuel surcharges, he says, are currently running as high as 30 percent for some types of operations. Because trucks haul 90 percent of all consumer products and foodstuffs and two-thirds of the country’s trade with the US, Bradley concedes this definitely could inflate the cost of consumer goods.

Bradley also said that the way fuel is taxed at the provincial and federal level “is archaic and regressive.”

“Business inputs and necessities should not be subject to a form of taxation reserved for luxuries or cigarettes. It makes no sense,” he says. The federal excise tax on diesel fuel was introduced during the Mulroney years for the stated purpose of fighting the government’s fiscal deficits, Bradley points out. “That bogey-man has been slain and the federal government is generating bloated surpluses. The excise tax on diesel fuel should either be used to maintain and expand the national highway system, or it should be incorporated into the GST, or it should be scrapped altogether.”

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