(March 18)Following President Bush’s ultimatum to Saddam Hussein on March 17, both crude oil and diesel prices experienced their first drop in several weeks.

U.S. Crude oil prices slipped by $2.40 per barrel to $32.53 per barrel, while the international average reached a three month low of $26.40, then finally settled at $27.45.

Prices for diesel, meanwhile, slipped to $1.752 per gallon following a record high of $1.771 the week before. The East Coast still experienced the highest average price at $1.805, but even that was down slightly from $1.815 the week before.

The average price in New England fell below the $2 mark to $1.991 while California’s average actually jumped slightly from $1.866 to $1.869.

Experts pointed to Bush’s 48-hour ultimatum as the main reason prices began to slip. An end to the uncertainty coupled with confidence in an easy U.S. victory over Iraq meant that many dealers were expecting only a brief disruption of supplies.

Those in the trucking industry, meanwhile, are still preparing for the worst. John Alvarez, owner of Alvarez Truck Brokers of Florida Inc., Ocala, Fla., sent a letter to his customers and to his carriers asking that everyone do what they can to help the trucking industry through this difficult time.

“Our spring vegetable deal from all growing areas is just around the corner,” he wrote. “Also our summer fruit and vegetable deal from California and the West Coast is rapidly drawing near. I can see the worst truck shortage we have ever witnessed if we don’t act now to shore up this rapidly failing industry.”

Alvarez said his company is lowering its brokerage fees across the board from 12% to 8% to help out the carriers and he hopes other companies will take similar actions.

Tim Moore, president and chief executive officer of Lange Logistics Inc., Nashville, Tenn., said surcharges are becoming almost a necessity for many smaller and medium-sized carriers.

“A lot of the smaller companies and even some of the medium and larger ones are going to go under,” he said. “It’s a matter of fact that this can’t continue.”

As for the dip in fuel prices, Moore said many of the carriers he works with were still waiting to see what happened next before deciding whether or not they could drop their surcharges.

“For as long as a war goes on, it’s a very fragile time for the industry,” he said. “The sooner fuel prices go down the better.”

If those prices don’t go down, Moore said the government might have to step in do something. Exactly what, he couldn’t say.

“There may have to be government support given to some of the transportation industry,” he said. “I do think that the government has to watch for price gouging.”

Moving toward war has had another affect on business as well, Moore said. Moore said Lange supplies commodities to several government facilities. As those facilities are shut down in preparation for war, Lange has had to reroute the trucks to other facilities.

“People don’t think that it impacts (a third party broker) as much as it does,” he said. “But it does because our customers are not only the manufacturers but the carriers as well.”