Bureaucratic Bungling:
Tale Of Two States
So here we are, coming out of a recession that buried a bunch of companies. Trucking is back in growth mode, right? Not if you're based in Illinois. Not if you're based in California.
Even though freight has picked up, brutally high fuel prices are hurting trucking companies no matter where they're based. But regulations in these two states place extra burdens on their own carriers — to the point of driving some out of business, or parking their trucks because to run them is to lose money.
In Illinois, new (and higher) truck registration fees coupled with the loss of tax exemptions are forcing companies to leave the state, cut back operations or just shut down. The situation, according to the Springfield-based Mid-West Truckers Assn.:
• In the past three years Illinois has lost more than 25,000 International Registration Plan (IRP) truck registrations.
• The state will lose another 8,000 this year as big companies choose to register their trucks elsewhere. Meanwhile, truck registrations have increased in surrounding states such as Indiana and Missouri.
• Illinois lost 2,718 registered IRP trucking companies in the past year. Some moved; others ceased operations.
Says Don Schaefer, the association's executive VP: "At a time when the trucking industry should be growing, we are retrenching in Illinois."
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California carriers' dilemma is fuel price-based, due primarily to state environmental rules requiring them to use California clean diesel fuel. It, too, is driving trucking companies out of the state, or out of business.
California diesel, originally estimated to cost four to six cents a gallon more than "federal" fuel, is selling for more than 50 cents a gallon above the national average as this is written.
Meantime, truckers based in other states are buying fuel elsewhere, entering California and taking business from the state's own carriers because freight rates are based on the average national diesel fuel price.
"How can a California trucker compete for freight when the majority of trucks are registered outside the state and are not required to refuel here?" asks Al Nunes, California Trucking Assn. president. Most surcharges don't cover the extra fuel cost.
Not only does this hurt the state's own trucking industry, it defeats the declared purpose of the clean fuel. California trucks that would use it are losing loads to out-of-state trucks that are burning plain old diesel.
Even worse, if it's true, is a rumor that California is looking into rationing fuel to its carriers. That, says the CTA, would result in "selectively eliminating California-based trucking companies."
There are bills in the Illinois Senate and House that would provide relief to trucking operations. And in California, the CTA has petitioned the governor's office for an executive order to level the playing field, including allowing the sale of federal fuel in the state, and investigating "the worst market manipulation since the energy crisis."
So there's hope for improvement in two cases where misguided legislators and/or bureaucrats didn't do their homework or didn't think things through — or both.
Hopefully, lawmakers and bureaucrats in other states are paying attention. They might see how much damage they can do to their own economies.
Nah.
But if you see trouble coming in your own state, you might use these two cases to get somebody's attention.
Doug Condra
President
