California Construction Trucking Association (CCTA)

December is usually the time we start to look back at the past year. This past year was so crazy… You all know what I mean. I want us all to go even further back in time.

Who doesn’t believe that it’s about time that the Governor and Legislature (the government) listens to the people? Our State and National economies are in a crisis.

The price of diesel fuel has finally dipped below $4/gal. in some areas around San Diego. In fact, the day I wrote this, oil was down to $94/barrel. Of course, the stock market isn’t doing so well. No one knows how long or if these fuel prices will hold, but it is much needed for the industry.

I think we are all aware of the State Budget deficit now and the negative ways it can affect so many things in this state including public works projects. This deficit problem will also continue to work its way down to every one of us in the State, in one form or another. Since the state has a big financial problem that means that most likely cities and counties are being short-changed their “vig” from the state as well and they are looking at new and creative ways to generate funds from the shrinking private sector, meaning taxes and fees.

Most of us who were able to attend the July CsDTOA Board Meeting in Woodland, came away with the reality that the industry may – no is – entering into a “brave new world” unlike anything we have experienced in the past. Many of us agreed that our past years of experience may not be of any help based on the many different challenges we face today.

At first glance, when I saw the membership numbers from our June Membership Report, I thought – whoa we’re down about 150 net members from just a year ago when our total membership was about 1,500. That’s about 10%. Than I thought about the Kaiser Plan being terminated, the dramatic down-turn in our economy, the construction slow down (some call it a depression), the high cost of operations in the transportation business (fuel) and frankly, I’m surprised there hasn’t been more who have dropped out. Maybe everyone (who is a member) understands the real value of the association.

All of you are probably like me, having a difficult time dealing with the “F-Words”, FIVE dollar diesel and FOUR dollar gasoline. This lousy economy and the lack of construction in general are making it hard to even try to recoup some of these high fuel prices, especially with the ridiculous rates we’re forced to operate under. A year ago, I was paying $3.20 a gallon for diesel. Currently as of the last week of May, I’m paying $5.09, an increase of $1.89 (60%) from a year ago.

Tax time is finally over for most of us. This year I put off getting it done and filing longer than I ever have in the past. I am not sure if it was because of the uncertainty of the times, due to the CARB engine rule or these bad economic conditions and work being so slow. I paid less than previous years in taxes, but that also means I made less profit, mainly due to higher costs of operations. I presume we are all in the same boat on this one. At least work normally picks up when tax time is over. We received some good news in mid-April with some big freeway projects being released here.

I can’t start without first touching briefly on the high price of diesel fuel. Well, at least around here (San Diego), it is well over $4.00/gal., a new benchmark in mid-March and the price continues to rise. The prices down here are about $1.20/gal. more than a year ago. I read that the average price statewide is over $4.11/gal.

This seems to be the new buzz word for our economic outlook in the near future. I cannot remember hearing this word used to describe our economy for almost 30-years, since Jimmy Carter was President. The raising price of fuel is feeding high inflation along with double digit price increase in metal and especially food commodities.

We are in the middle of the rainy season, the good news is we appear to be getting much needed rain, but on the down side our economy appears to be very challenged. The Federal Reserve on Jan. 30 cut interest rates for the second time in just over a week, reducing the federal funds rate by a half point. It signaled that further rate cuts were possible.

I would have liked to start this New Year on an optimistic note – but I cannot seem to find one. With work being as slow as it has been for the past few months and the forecast for work to remain slow, it is hard to come up with something positive to say. We are all going to have to make some hard business decisions the first half of this year.