Jevic Transportation Folds; Fuel Prices, Economy and Insurance Cited as Reasons

Jevic Transportation, a Delanco, New Jersey-based trucking firm announced today that it is shutting down citing high fuel costs and the economic downturn as well as the high cost of insurance as the major reasons. There is another factor that I am sure plays a role and that is driver retention.

Drivers are often asked to be on the road for months at a time and are forced at times to put up with inferior equipment as well as running trips "empty." Further, the average age of drivers has lowered, impacting accidents and insurance. Additionally, in an effort to offset fuel prices, drivers don't take their correct rest periods, which again, can further affect their accident ratio.

In the late nineties, I was part owner of a taxicab company. We had as a client a truck center and we picked up driver after driver to take to the airport because they couldn't take it anymore. They had been on the road for three, four or five months and the companies would promise and promise and promise breaks, but, would never come through.

Today, it is not difficult to see the impact of the trucking industry on the economy. I live in a reasonably sized city with good interstate access and still many of our major grocery stores are showing shortages week in and week out.

I don't believe the trucking problem has anything to do with the economy. Stores just pass their food costs on to the consumer (although they do minimize their reserves) as do restaurants although, there are some changes in fare such as steak to buffalo yet, that still has to be shipped. No, the problem is fuel. The demands of a trucker's job are bad and they have to be well paid and even then the turnover is high. When the fuel price affects the company, it affects the drivers who are at times responsible for their own fuel. Of course if the driver is an "owner-operator" then the problem is obvious.

Independent truckers have also played a role in this problem they have "gone on strike" at times which does play havoc with the economy because there is no way that commercial trucking can keep up.

Basically here is the phenomenon you have; it is not unlike that of any business that is running with a lot of marks against it.

The trucking industry has had to continue to work with a comprehensive fleet that has continued to age at a faster rate than replacement allows. There has not been the professional growth of the industry one would expect or need because the industry is so hard on people they have to leave. Younger drivers come in with not near the driving hours and experience and have more accidents plus they don't have the stamina that professional drivers do because they haven't been around long enough to learn the tricks of the trade.

Finally, now, fuel has hit the industry incredibly hard and yet their clients won't pay them an equivalent amount for receiving the products, opting out for minimizing their reserves of product.

The United States has been looking at fuel from the standpoint of inconvenience. Our citizens don't like to pay more of their money for gas. However, as a country, we had better start understanding the true impact of ridiculous and out-of-bounds fuel prices and that is a crippling of our society which could result in the inability of the United States to continue to function effectively!

References:

breaking-news-online.com
Google.com truck driver shortage