Professor Bernard's picture

Fuel, Maintenance and Labour

By Bernard

Operating an 18 wheeler is very expensive, mostly because of the maintenance, but also because of the price of fuel and the labour that come with it.  Like where my dad works, if you manage to have your own garage, you could possibly do all the maintenance on the fleet and save money on the labour.  On average, an 18 wheeler costs $4000 per week to operate.  On average again, it will bring back approximately $5000 per week.  Now you still have to pay the driver and you are left with around 400 dollars net in your pocket at the end of the week.  That also includes the cost for insurance and so on.  An efficient 18 wheeler will run for around 7miles per gallon.  Now with the price of fuel, a week of driving will add up to around $1500 worth of fuel, for an average week of 2500 miles or 4000 kilometres.  The fuel tanks contain around 300 gallons of fuel.  Fuel is what really kills.

How this affects everybody in the long run?  Simple, let me explain.  Whenever the price of fuel goes up, it gets more expensive for truck companies to run their trucks.  They have to compensate for that rise in expenses by asking for more money to transport goods.  Now that the factories and big distribution centres are being charged more for their goods, they have to cover that loss in capital gain and pass on the bill to the lowest link, the consumers, by raising the price of their goods.  When the price of goods rises, people stop buying or at least slow down the spending.  When that happens, companies start losing more money.  Then employees get laid off and less money gets thrown in the market because people need to save in order to survive.  It is a big vicious circle that never ends.  This disgusting theft of people’s money is due to the high price of fuel, well not entirely, but it plays a major role.  The world revolves around the enriching oil industry.  Why is gas that expensive?

Yes, why is gas that expensive?  What makes that gas so expensive you ask? Well, a big part of it is caused by the government.  They put a tax on a tax.  What’s wrong with that?  They put what they call an excise tax on fuel.  The government taxes you and the oil company after a tax already imposed on the sale of goods and services, which is of almost 15%.  Approximately 10% goes to the provincial government and 9% to the federal government.  All the money taken by these taxes all comes down to around 27 cents, depending where you buy the gas.  Now imagine if those taxes weren’t there to steal your money. If you do the math, an average person who drives to work every day will consume around 65 litres of gasoline per week.  Now take away the 27 cents of tax on an average gas price of $1.33, which would cost you around $85, will cost you $68.  Over a year, you would save almost $1000.  Can you imagine?  Your references? (I used my dad’s statistics on this part….)

Also, big producers are turning toward the railroad companies to transport their goods.  Why?  That’s because a train will transport a lot more than a truck can, for much cheaper.  For example, in 2006, a gallon of diesel fuel moved one ton of freight an average of 406 miles.  Very big difference if you compare it to a truck which will go for around 7 miles per gallon, with 24 tons of merchandise.  The trucking industry is slowly shrinking, but will never die because you still need trucks to get to all the grocery stores and everything that isn’t near a railroad track.