Release Date: 05 August 2009
Release ID: 4208
Arlington, Va. – The Commodity Futures Trading Commission (CFTC) must act to increase transparency in energy markets and curtail excessive speculation by establishing aggregate position limits, said Schneider National Inc. Vice President Steven Graham during today’s commission hearing.
Testifying for the American Trucking Associations (ATA) and the nation’s trucking industry; the executive of the Green Bay, Wis., company told the Commission that these measures will reduce volatility and ensure that current commodity prices are connected to the market fundamentals of supply and demand.
“Diesel fuel is the lifeblood of the trucking industry, and sudden fluctuations in operating expenses, especially fuel, can devastate trucking companies,” said Graham. “Increasing transparency and setting position limits while preserving the ability of commercial entities to hedge fuel purchases will strengthen the link between commodity prices and market fundamentals.”
Each year, commercial trucks consume over 39 billion gallons of diesel fuel. This means that a one-cent increase in the average price of diesel costs the trucking industry an additional $397 million a year in fuel expenses. Fleets spent an astonishing $151 billion on fuel in 2008, a $36 billion increase from 2007 and more than double the amount spent in 2004.
The trucking industry relies on diesel fuel to deliver almost 100 percent of consumer products around the nation. Nearly 80 percent of U.S. communities rely solely on the trucking industry to deliver the food, clothing and medicine they need for their daily lives. High fuel prices also affect consumers. Ultimately, the consumer is forced to pay higher prices for these necessities.
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