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Ron Way's suggestion that the public direct its ire toward the "giant truck lobby" preventing "big trucks" from paying "their share" is smoke and mirrors. Make no mistake — average Minnesotans will be paying in either case ("The case against the case against a higher gas tax," Opinion Exchange, June 8).
I hate to be the bearer of bad news, but profit margins in the trucking industry are already razor-thin. This is evidenced by repeat consolidation within the industry in often futile efforts to achieve the economies of scale necessary to survive. Our very own C.H. Robinson, the nation's largest truck brokerage firm, laid off 950 employees in the last 12 months alone. This is not typically something that happens within an industry with unjustifiably fat margins.
I help run a fleet of five semis, and diesel fuel on a month-to-month basis is 50% of our expenses. According to AAA, yesterday's average diesel price was $3.821 per gallon. Of this price, state and federal fuel taxes account for 14%, which translates to 7% of our total expenses. Even a modest $0.10 increase from $0.529 per gallon of diesel to $0.629 per gallon would represent an 18% increase in overall state and federal fuel tax burden, or a 9% overall increase in total company expenditures.
There are very few, if any, trucking companies operating at a 9% profit margin. In such a scenario options are limited. A company could close up shop, leading to a reduction in truck supply and enabling the remaining trucks to command higher prices. Alternatively, a company could raise freight rates, directly leading to an increase in the cost of goods on the shelf.
While Way's attack on the trucking industry may be cathartic in the context of our contemporary populist moment, it presents a false choice between increased prices at the pump for average motorists and sticking it to "Big Trucking." The reality is that the burden of road maintenance falls on the household budgets of average Minnesotans no matter the funding mechanism.
Brian J. Krause, Minneapolis