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Issue 15 Do you have a friend or colleague who would like to receive this eFlash, click here. |
Back on April 12, 2005, Acting New Jersey Governor Richard J. Codey signed legislation increasing New Jersey's hourly minimum wage. The first raise will be effective on October 1, 2005, when the hourly minimum wage will increase from the current $5.15 to $6.15, and increase of 19%. The next raise will be effective on October 1, 2006, when the minimum wage will increase to $7.15 per hour.
Obviously, these increases, in conjunction with the rising cost of fuel and utilities, are putting a tremendous amount of pressure on the transportation, warehousing and distribution businesses centered in and around the ports of New Jersey and New York.
As many in the industry can attest to, rates for services have remained stagnant for many years, as the minimum wage has not increased since 1999. However, these announced increases will surly force warehouse and transportation service providers, such as FMI, to review their current rate structures.
Please be assured, FMI will not make any decision regarding rate increase without first consulting with our customers. However, economic conditions beyond our control will force to evaluate and act on these issues imminently.
An economy that was showing signs of flattening even before Hurricane Katrina bludgeoned the Gulf Coast will now have to battle even harder to regain its footing as high energy costs threaten the businesses of shippers and their trucking providers.
Recent reports from government and private analysts and interviews with transportation managers reveal a sense of unease over whether consumer spending — usually about two-thirds of gross domestic product — can remain at high levels. Soaring prices for gasoline, natural gas and home heating oil are gobbling up higher proportions of what had been disposable income for food, clothing, vacations and home appliances.
“Hurricane Katrina is past, but will likely end up the single worst natural disaster in U.S. history,” wrote Standard & Poor’s financial analysts David Wyss and Beth Ann Bovino Sept. 2.
The U.S. average retail price of diesel fuel rose a record 30.8 cents to an all-time high of $2.898 a gallon, while gasoline soared 45.9 cents to $3.069, the first time the average has topped $3, according to the Department of Energy.
The diesel jump marked a fourth straight all-time record high price for trucking's main fuel, which is $1.029 a gallon higher than this time last year.
That would add $205.80 to the price tag of a trucker filling a big rig’s 200-gallon diesel tanks and boost the trucking industry’s costs by about $685 million for the week, at a burn rate of 665 million gallons, over the same week last year.
Gasoline was $1.219 cents above the price following Labor Day last year, which would add $353 million in costs to the trucking industry for the week at a burn rate of 290 million gallons of gasoline a week.
Regional diesel average prices rose sharply in all five DOE regions. The East Coast led with a 33.6-cent gain to $2.90, with the Gulf Coast not far behind, rising 32.5 cents to $2.833 a gallon.
The Midwest region’s price jumped 31.1 cents to $2.843 and the Rocky Mountain region’s rose 25 cents to $2.976, DOE said.
The West Coast region remained the highest national average, spiking 22.9 cents to $3.149 a gallon, while the California sub-region rose 20.5 cents to $3.25 a gallon.
FMI will continue to monitor the price of diesel fuel closely and keep our customers informed to the Fuel Surcharge Index for both pier drayage and line haul moves.
©2005 FMI International