Spokane businesses and government agencies are feeling the pinch from the nations rising fuel prices, but for the most part commerce hasnt slowed here because of the higher prices.


To ride out the costly climb, several transportation-related businesses are tacking fuel surcharges onto customers invoices and are reminding their drivers to operate their vehicles efficiently by driving slower and decreasing idling time.


Still, despite higher fuel costs, demand for freight hauling and delivery services here remains steady, ridership at the Spokane Transit Authority is rising, and people havent reined in their travel plans much this year, say transportation-industry sources here.


Prices at the pump actually began climbing last year, after the Organization of Petroleum Exporting Countries announced production cutbacks. However, fuel prices really took off early this year.


Since the beginning of the year, unleaded gasoline prices in Spokane have jumped 21 percent, and over a 12 month-period, prices have soared 49 percent, says Ed Sharman, spokesman for Inland Automobile Association-AAA.


The average price of self-serve, unleaded gasoline here jumped 12 percent to $1.58 a gallon between the week of Feb. 23 and the week of March 27, Sharman says. As of March 14, the national average price of unleaded gasoline was $1.54 a gallon, he says.


Diesel prices have increased similarly.


System-TWT Transportation, Spokanes largest trucking operation, has begun adding a surcharge to customers bills to help cover the added fuel expenses. In addition to customers typical base rate for freight hauling, the Spokane trucking company has been tacking on an additional charge of 6 percent to 8 percent for fuel, says Don Piontek, System-TWTs fuel and license manager.


Our guys have seen and paid more than $2 a gallon recently on the East Coast, Piontek says. He adds that System-TWTs average rig holds about 180 gallons of diesel fuel.


We had one truck fill up recently and it cost about $400, Piontek says. Seeing those kinds of gas receipts is pretty shocking. A year ago, that same truck would have cost about $180 to fill up.


Lom Hutchins, vice president of Produce Supply Express Inc., of Spokane, says the produce hauler instituted a 5 percent fuel surcharge to its truckload freight charges in mid-February.


The surcharge helps, but the problem is that it doesnt cover all of the miles you run. It just covers the miles that you haul, Hutchins says. The surcharge is rated on a schedule that assumes you drive in this great straight line and that you dont get lost.


While Produce Supply has felt a bit of a pinch, Hutchins says the rising fuel prices havent had as much of an impact on the trucking company because it has grown accustomed to paying higher prices on the routes it runs. About 45 percent of the miles that Produce Supply runs are racked up in California, where diesel fuel prices consistently run 8 cents to 10 cents a gallon higher than the national average, he contends.


While people elsewhere had been enjoying diesel prices of around $1 a gallon last year, we still were paying around $1.40 a gallon, Hutchins says.


As of March 27, the average price for diesel fuel nationally was $1.45 a gallon, compared with an average price of $1.60 a gallon in Spokane and at many places on the West Coastwith the exception of California, where the diesel price averaged $1.63 a gallon.


System-TWTs Piontek says that fuel costs are the trucking companys second largest expense, following labor costs. About 26 cents of every dollar that it takes to operate a truck currently is spent on fuel, he says.


Were going to be OK, but the sad thing is that if these prices continue, we will be seeing some trucking companies closing their doors. It makes for some pretty lean times, especially in the trucking business where there isnt a lot of margin to begin with, Pointek says.


Demand still up


Still, both Pion-tek and Hutchins say that demand for freight hauling has remained strong.


Jim Thurber, president of City Parcel Delivery Inc., of Spokane, says the demand for delivery service also has remained steady, despite the 2.5 percent fuel surcharge City Parcel began tacking on last month.


Im hoping that maybe the private guy is wanting to park his own car, and hire someone else to do the driving, Thurber says.


He says that the last time he remembers the company having to charge a fuel surcharge was back in the early 1990s.


Were a fairly small business, so these higher fuel prices are having a pretty big impact, Thurber says. The delivery service, which operates a fleet of 60 vehicles and serves Eastern Washington, North Idaho, and Western Montana, goes through about 1,000 gallons of gas a day.


For awhile, the gas prices at the service station we fill up at it were going up about a nickel every three or four days, Thurber says. Im hoping the prices have steadied some now. I havent noticed an increase lately.


Don Roberson, director of fleet services at the city of Spokane, says the city also has been hit by the higher fuel prices. The fleet-services department provides vehicles to the citys police department, as well as snowplows and street sweepers to the citys transportation department.


The fleet-services department, which buys fuel both in volume for its own storage tanks and from Pacific Pride card-lock stations on an as-needed basis, uses about 382,000 gallons of unleaded gasoline and 544,000 gallons of diesel fuel annually. Roberson says the city police department alone puts a total of about 1 million miles on its vehicles annually.


In December, the city was paying $1.09 a gallon for unleaded gasoline and 86 cents for diesel fuel. By March, those prices had increased to $1.31 a gallon for unleaded and $1.16 a gallon for diesel. Roberson says that if fuel prices were to continue at their current levels, the city would have to spend an extra $247,000 this year on fuel.


To conserve fuel, the fleet-services department has continued to encourage the citys police officers, garbage-truck drivers, and other employees to drive sensibly, not idle their vehicles, and carpool to meetings or better yet, use other ways to meet, such as holding conference calls.


Prices boost STA ridership


While Spokane Transit Authority also must battle with high fuel prices, it hopes the higher prices will boost business.


Allen Schweim, STAs executive director, says the transit authority goes through about 1.5 million gallons of fuel a year. STA, which uses both diesel fuel and unleaded gasoline, buys its fuel from a supplier and stores that fuel here. Schweim says that if fuel prices were to continue at their present level for the rest of the year, STA would have to spend an extra $250,000 to $300,000 by year-end.


Fuel accounts for between 10 percent and 11 percent of our operating budget, and thats going to spike upward this year, Schweim says.


Still, STA has seen an about 7 percent increase in ridership since January.


Weve been studying this for years, and every time, we see ridership increase right behind the increase in gas prices, Schweim says.


STAs challenge, however, is to retain a certain number of those new riders on a long-term basiseven after fuel prices begin to drop back to their normal levels, Schweim says.


We really want people to consider the STA as a viable option, Schweim says. Besides, the money they save by riding the bus, they can spend on those summer vacations.


Vacation plans


While most people would assume that higher fuel prices would tend to slow peoples interest in traveling, that hasnt seemed to be the case during the recent fuel-price run-up, says the Inland Automobile Associations Sharman. He says that just as many AAA members have requested travel information this year as last year.


Likewise, Hartly Kruger, president and general manager of the Spokane Area Convention and Visitors Bureau, says the CVB has seen a significant increase in the number of people requesting travel information about Spokane from the agencys web site this year compared with last year.


I dont think were going to see much of an impact at all from the higher gas prices, says Kruger. The American economy is doing well, employment is up, and people are going to continue to travel.


Kruger predicts, however, that the tourism industry might see a drop-off in the amount of RV business because of the cost of fueling such large vehicles.


For the most part, people are just grumbling and biting the bullet, Sharman says. When you look at it, its costing people more to travel no matter what form of transportation they take. You either pay the airlines or you pay the gas-station operator.