(The following article by Dale Kasler was posted on the Sacramento Bee website on April 29.)
SACRAMENTO, Calif. — High diesel fuel prices rattled California’s transportation industry Wednesday, as independent truckers in Stockton walked out for a third straight day and state officials discussed an allocation system to ensure adequate supplies for emergency vehicles.
The standoff between trucking firms and several hundred independent drivers caused a partial shutdown of Union Pacific Corp.’s railyard in French Camp, south of Stockton. To prevent goods from stacking up there, UP placed an embargo on the yard Wednesday, limiting the volume of freight that could be brought in by rail.
Irate over diesel costs that have risen 18 percent this month – topping $2.30 a gallon – several hundred independent truckers have refused to haul goods from the UP and Burlington Northern Santa Fe yards around Stockton until they get a big increase in shipping rates. In addition to soaring fuel costs, the truckers are worried about other expenses, such as medical costs.
Their action has bottled up freight bound for warehouses and other sites from Sacramento to Fresno, but it was hard to say if the informal strike would translate into shortages in the region. Trucking executives said the dispute would have to continue several more days to create short-ages. And spokeswoman Steph-anie Williams at the California Trucking Association said drivers from Arizona and Oregon, with access to cheaper fuel, are coming into California to make deliveries and pick up the slack.
At the same time, though, there was speculation that the dispute could spread to other sites, ports as well as railyards, where truckers pick up goods and haul them to customers.
UP spokesman John Bromley said his company heard reports that drivers might stage similar actions at UP yards in Oakland, Long Beach, Los Angeles and Commerce. Protests or walkouts also were anticipated at the ports of Los Angeles and Long Beach, although nothing had materialized as of Wednesday.
“We heard there may be something this week – it might be a rally, it might be some kind of work stoppage,” said Art Wong, spokesman for the Port of Long Beach.
Average diesel prices in California dipped about a penny Wednesday, to $2.34 a gallon, but they’ve still risen 35 cents in a month. The state’s most expensive diesel, at $2.41 a gallon, was in San Luis Obispo. Sacramento diesel averaged $2.27.
Williams said a slew of trucking firms are getting squeezed between diesel prices and shipping rates that aren’t rising nearly quickly enough.
“They can’t pass on costs,” she told a joint hearing Wednesday of the Assembly Transportation Committee and the Select Committee on Gasoline Competition, Marketing and Pricing.
Not only are prices high, but state officials are fretting that some areas might run short on fuel.
At the hearing, Commissioner James Boyd of the California Energy Commission said his agency has briefly looked at implementing an allocation system that would divert diesel supplies to make sure emergency and public safety vehicles have enough.
But Boyd, in an interview, denied claims by the trucking association that such a plan was on the verge of being implemented. The trucking group opposes allocation, which could tighten supplies considerably for commercial users.
The Energy Commission has been tracking supplies of gasoline and diesel closely for several weeks and became particularly alarmed when diesel supplies fell dramatically in early April, said commission spokeswoman Claudia Chandler. The governor would have to declare a state of emergency before an allocation system could kick in. She said it’s never happened before.
Diesel usually rises and falls in tandem with gasoline – and is usually cheaper. But some refinery production problems in recent weeks have put a strain on diesel supplies, making diesel more expensive than gas, said Irvine-based industry consultant David Hackett.
California diesel is about 18 cents a gallon more expensive than regular gas, according to AAA.
It’s not just supply glitches. This is prime time for diesel consumption because farmers are using equipment for planting crops, said spokesman Bob Krauter at the California Farm Bureau Federation.
Hackett said California diesel supplies suffer from the same basic problem as gas. In part because of the state’s strict clean-air specifications, there are relatively few refiners outside the state geared up to make California-ready fuels. Because diesel is sold in smaller volumes than gas, it’s even tougher to find imported diesel, Hackett said.
The trucking association said the clean-air rules are putting California truckers at a disadvantage – and not really cleaning the air. That’s because out-of-state truckers are taking over California deliveries, it said. California diesel is 56 cents a gallon more expensive than the U.S. average.
California’s clean-air rules “don’t stop all the truckers who may be coming in from Oregon or Washington or Nevada … and hauling our freight,” said trucking association President Al Nunes, who runs a Manteca trucking firm.