Arkansas trucking company Maverick USA lost money for the first time in its history last year and is on pace to do even worse this year because of record-high fuel prices, the head of the Little Rock-based firm said Monday.
Maverick's diesel fuel bill is expected to increase 72 percent to nearly $115 million this year if prices merely remain steady at their current all-time high, said company chairman Steven Williams.
At a congressional hearing on the rising cost of fuel, Williams said Congress must develop a strategy to solve the fuel crisis that is driving truckers out of business.
He cited a Stephens Inc. analyst's study that said high fuel prices could force 14 to 16 percent of U.S. trucking companies out of business.
"This strategy must first focus on what factors are driving the cost of diesel," said Williams, whose company owns the second-largest fleet of flatbed trucks in the country.
Despite $300 million in revenues last year, Maverick lost money for the first time in its 27 years largely because of fuel prices and their dramatic effect on the economy, Williams said.
Williams testified before a House Energy and Commerce subcommittee.
Rep. Mike Ross, D-Prescott, is an energy committee member who introduced Williams at the hearing.
"Steve Williams understands all too well the dramatic toll that rising oil and diesel prices are having on the economy as a whole, and the trucking industry in particular," Ross said.
Maverick USA has 2,000 employees and operates more than 1,500 trucks.
But Ross said 95 percent of trucking companies are small, family-owned businesses. Many of them already "have fallen victim to the exorbitant cost of diesel fuel."
Democrats on the panel blamed Wall Street speculators for investing in crude oil futures to turn a profit.
The large investors drive up prices for oil they do not intend to accept, Democrats said. Several congressmen have introduced legislation to restrict oil futures speculation.
Republicans argued the prices are based on an unstable dollar and skyrocketing demand in other countries.
Williams said he didn't think supply-demand concerns were a culprit.
The Arkansas Trucking Association took a similar stand in March when it asked the state's congressional delegation to request a hearing on the issue.
The association said fuel prices are rising despite ample supply and no significant spike in demand.
The trucking group represents 84,000 Arkansans and more than 300 corporations, including J.B. Hunt Transport Services, USA Truck and ABF Freight System.
A fuel-price fix is needed quickly, according to Williams.
In the next two decades, 87 percent more trucks will be needed on the nation's highways to keep up with societal demands.
He said Congress must begin to look now at policies to decrease speed limits, improve safety technologies and build new roads.
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