Trucking, Bus Companies Move to Raise Rates : Transportation: Regulators ease rules on price hike notification to lessen the impact of higher fuel costs after the invasion of Kuwait.

TIMES STAFF WRITER

Some of the nation's largest bus lines and trucking companies are raising bus fares and shipping rates to help cover the sharp jump in fuel prices that has followed Iraq's invasion of Kuwait.

Analysts said many smaller firms also probably will raise their prices if oil costs continue their dramatic march upward.

On Tuesday, the Interstate Commerce Commission took an unusual step to help trucking companies respond to higher fuel costs. The ICC said truckers can now raise rates on one day's notice instead of the seven days' advance notification to customers usually required.

The trucking industry argued that it needed more freedom to adjust rates because fuel costs are changing so rapidly. Diesel prices have risen 30% since the end of July, according to some industry executives.

This is the second time this year that trucking firms have raised their rates to cover fuel costs. In January, they raised rates in response to higher prices caused by a prolonged cold snap in the Northeast.

Most trucking executives said their customers were willing to pay the additional freight charges, even though the nation's largest trucking firms imposed a 5% rate increase in June. "They are just passing it on to the consumer," said Jerry Moyes, owner of Swift Transportation in Phoenix.

Trucking industry executives and analysts said the shipping rate hikes will probably be passed on to consumers, but the impact should be small. Kenneth D. Simonson, an economist with the American Trucking Assn., said shipping costs contribute less than 1% to an item's retail price. The fuel surcharges imposed by trucking firms range between 1% and 4%.

Consumers probably will notice the fare hikes by the nation's bus lines and airlines. Greyhound Lines and Trailways Lines last week raised fares 2%, or an average of 60 to 70 cents a ticket, and a spokeswoman for the two bus lines said fares may go higher. "It is a situation we monitor daily," said spokeswoman Liz Dunn. "We cannot continue to absorb increased fuel costs."

Some smaller bus lines, such as Airport Cruiser, can't easily raise fares because they are locked into contracts with tour operators that were negotiated months ago. "Fuel prices have risen outrageously, and we haven't been able to raise prices," said Debra Mintz, owner of Airport Cruiser, based in Buena Park.

Mintz said the summer is normally the most profitable season for her company, which transports tourists from Los Angeles International Airport to hotels near Disneyland. "We normally make enough in the summer to hang on through the winter," she said, but with the fuel hikes "our profit level is dipping really low."

The airlines have announced fuel-related fare hikes. Major U.S. carriers, except Trans World Airlines, had said they planned to raise domestic fares 5.3% Thursday, but that may change. TWA said Tuesday that it plans to put the same fare increase into effect Aug. 30, and it appeared probable that the other airlines might postpone their fare increase until then.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
53°