Originally posted by sigma:


Large trucking firms hedge fuel costs and negotiate volume discounts leading to drastic reductions in fuel costs that owner-operators cannot meet. And the larger the firm, the bigger the discounts they can get. With fuel being, by far, the single biggest expense of trucking, a competitive advantage there is huge. And, unlike other industries, it's very difficult for smaller companies or individual owner-operators to offer any significant service differentiation to offset their added costs what with the government ruling over what can and cannot be done. So, what they're forced to do, is undercut their rates to match those of the larger firms. This forces pricing of a very supplier-diverse market into the hands of just a few companies that essentially dictate the pricing of everyone else.




I wasn't aware that the larger companies negotiated and/or bought futures on fuel, sounds like smart business practices to me.

Quote:

It wouldn't be a bad idea if we weren't operating at or beyond capacity throughout much of the rail industry. Unlike trucks we can't just stick another train on the rails and expect the government to build some new infrastructure when what we have is backed-up.



Is this nationwide or in your region? Trains seem to be a rare occurance here in the Northeast despite a pretty good infrastructure (although I am sure they are probably taking tracks up )

"Bros before Hoes" <-- More men need this mentality.