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Record-high fuel prices crippling BC trucking industry

Fuel surcharges not enough, government tax cuts needed to protect profit margins for truck drivers and keep a lid on grocery prices
Fuel prices truck Getty Images
Record-high fuel prices for truckers are putting constraints on the industry and leading to high-priced groceries for consumers.

The trucking industry is in big trouble and high fuel prices are only part of the story.

Steve Tosoff has been a trucker since 1989 and never in that 33 years has been so worried about what’s happening to one of the province’s most crucial essential services and he predicts dire consequences unless the government intervenes.

Tosoff, the general manager of Overhaul Ventures Corp., a Prince George trucking firm that employs a staff of about 60, says the unprecedented cost of fuel, cutthroat competition for drivers who are already in short supply and the refusal of governments to cut fuel taxes is reducing profitability in the industry and could put it into an irreversible tailspin.

“It’s crippling,” said Tosoff. “Our trucks are averaging $1,800-1,900 a day in fuel and we have 27 trucks doing that.

“Rates don’t go up just because we need them to go up, they go up when the customer figures they should. We haul for a pretty good  customer that treats us pretty fair but when fuel goes up everybody’s slow to make changes, but when fuel goes down they quickly cut the rate. It’s one of those things where you can’t win.”

Tosoff has been in the business since he bought his own truck as a 21 year old and he sees no justification for the record prices at the pump. Consumers are at the mercy of the fuel companies who base what they charge on what the world oil price is, but as far as he can tell, there’s no way motorists in B.C. should be paying even close to $2 per litre of fuel.

A perceived threat to oil supplies at the onset of Russia’s war in the Ukraine caused gas prices to jump by almost 60 cents per litre, with even higher costs expected this summer. Despite the threat to household budgets and more people moving below the poverty line as a direct result of fuel prices, no level of government has reduced the tax rate on fuel.

At each B.C. filling station outside of Greater Vancouver and Victoria (which also have municipal fuel taxes), provincial taxes account for 28.01 cents for every litre of diesel and 25.55 cents per litre of gasoline. The federal government adds a 10-cent excise tax on every litre of fuel sold in Canada and also charges five per cent GST.

“This is all a scam, every long weekend fuel prices go up, how is that possible?” he said. “The government has to lay off. They keep taxing us to death on everything and they’re making it harder on everybody.

“You can only raise the prices of groceries so far before people can’t afford to eat.”

Overhaul Ventures is contracted to haul groceries to and from supermarkets all over Western Canada. The trucking firm receives fuel surcharges of about $1,000 per load from its larger customers, which include Canfor and West Fraser Timber, but the surcharges are not enough to offset the huge spikes in fuel costs over the past three months. Bound by five-year contracts at fixed rates, there’s nothing the truckers can do to receive more for their trips and their profit margins drop as a result.

“It’s tough to survive, we run a very efficient company, but it’s tough,” said Tosoff. “These guys that own one or two or five or 10 trucks, they’re not going to make it, they can’t survive. We can survive because we run 365 day a year without ever a slow time, unlike loggers who have seasonal work or layoffs You have one flat tire and that can make or break your day. A tire is worth 800 bucks.”  

It becomes even more of a challenge for truckers to turn a profit when adverse weather and natural disasters are thrown into the mix. The unpredented rainstorm that swamped southwestern B.C. last November washed out highways, cut off supply routes and led to a shortage of some food items in grocery stores. Drivers were stuck waiting for highways to reopen and the companies they work for were forced to pay their wages with no revenue to cover them. Truckers resorted to working longer hours behind the wheel to circumvent the obstacles they faced and hauled goods from Calgary and Edmonton, unable to move along the shorter route from Surrey to Prince George to serve points west of the city along Highway 16. The B.C. wildfires of 2017 and 2018 caused similar disruptions in the supply chain in the Cariboo region.

“We broke every law and every rule to pick up groceries and get to where we needed to be, but sometimes you wonder why you do it because nobody cares, ” said Tosoff. “They just get pissed off when there’s no milk in the store.”

Shortages of qualified drivers is an ongoing issue for trucking firms and with such high demand from resource-based industries who can’t fill job postings for drivers, there’s no simple solution.

“We were already in trouble before fuel prices (spiked),” said Tosoff. “Drivers’ wages are out to lunch and you have to pay the price or you don’t get the driver. He can quit any time and go somewhere else because everybody’s starving and wants to run their truck hard and they can’t afford to  have it sitting for a day now.

“It’s very questionable times right now and I don’t think people understand the predicament we’re in. Not only is there a huge shortage of drivers but why would you  want to do this job? You’re pushing harder and harder for less money every day.

”People don’t understand how important trucking is. There was a time when I started in the late 80s and 90s, anybody could buy a truck and go to work and make a respectable living. Now it’s nothing but rate-cutting and throat-cutting and it’s just brutal because everybody’s hurting.”