Long Islanders lack an appreciation for the meaningful role that trucks play in our region’s economy, especially those owned by small, independent businesses and entrepreneurs. Misfortune for Long Island’s truckers has pervasive adverse consequences for the rest of us.
A number of signs point to fuel oils rising to $4 per gallon before the end of 2011. This will be a catastrophe for trucking budgets similar to the historic economic fallout this sector suffered about three years ago, when America last saw galloping fuel price increases.
At the same time, many municipalities, including the New York State Thruway, the Triboro Bridge & Tunnel Authority, the Port Authority of New York/New Jersey, and the New York City were pick-pocketing truck owners with additional tolls, fees and parking summonses.
In response, many truck owners idled, parked or sold their trucks, effectively going out of business. This sector finally stabilized in the past year and there have been small signs of a comeback, which will now disintegrate.
RMP Capital “lives” with some of these truckers and their financials everyday. Too many of them are guilty of handling their budgeting “from their shirt pocket,” rather than planning methodically for leaner times. Truck owners – with fixed capital and operating expenses, and facing declining delivery volume – in desperation will price freight loads so low they will be left with no profit margin and will sometimes operate at a loss.
Generally, federal regulations and tax opportunities covering the trucking sector favor the national, unionized companies and not the small independents.
Imagine the consequences for Long Island if the costs on everything from food, to construction materials, to consumer products rose an additional 5 or 10 percent because of the additional expense involved in making deliveries to/from Long Island.
Despite all of the talk about mass transit, the fact remains that, about 95 percent of Long Island’s deliveries are transported by truck, representing an estimated annual tonnage of more than 100 million, according to the New York Metropolitan Transit Council.
We must be much more sensitive and committed to the needs of this sector.
Barrick is president of RMP Capital Corp., an Islandia-based national factor focusing on the trucking industry.