Rising diesel prices clobbering Illinois trucking companies
CHICAGO - Trouble for truckers, as the price of diesel is on the rise and it’s hurting the industry.
"What this really impacts is consumers, because eventually our industry has to pass along higher fuel costs," said Matt Hart, Executive Director of Illinois Trucking Association.
Diesel costs more than $5 a gallon across Chicago, although when adjusted for inflation, the price about 14 years ago was equal to $6 a gallon.
The huge spike up we've seen is clobbering trucking companies, which employ one out of every 14 workers in Illinois.
"The one thing about the trucking industry is we don't have a whole lot of alternatives. You know, when you're going out buying an automobile, you can buy a gasoline automobile or you can buy an electric car today. We don't have those alternatives in the trucking industry. Diesel fuel is still the main fuel out there to deliver the goods that Americans need," said Hart.
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The average price of diesel fuel nationally is now at $5.29 a gallon — about twice as much as a year ago.
During the pandemic, hundreds of new trucking companies started up in Illinois in response to the demand for home delivery of everything consumers were ordering online. Illinois now has about 43,000 trucking companies, big and small, employing about 350,000 workers.
You might think service station owners would be enjoying this round of near-record high fuel prices, but think again. Some drivers are cutting way back and the amount of gallons that stations are pumping has dropped 20% in some parts of Illinois.
"For my members, it's made life difficult. They're selling less gallons. And I think in the border areas, where you have taxes that are so much lower in neighboring states such as Missouri, for example, it's much worse. They're selling a lot less gallons," said Josh Sharp, CEO of Illinois Fuel Retail Association.
In addition, Sharp said with fewer motorists in their stations, sales were also down on convenience store items where many "make most of their profit… hot dogs, candy bars, you know, beer, soda."
The soaring cost at the pump of diesel and other petroleum products is generating a tax windfall for state and local governments, which get more sales revenue as prices rise. The spokesman for service stations said they'll likely pay about $3.5 billion this year to national, state and local governments.