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Regulations and economy combine to create tight truck situation

by Tim Linden | July 08, 2010
Numerous factors have created a nationwide truck shortage and higher freight rates, with the impact being especially acute in California because of new state regulations on reefer emissions.

Irvine, CA-based Western Growers Association sent out an advisory to its members in late June stating that rates were already climbing.

The advisory said that a combination of factors — including the credit crisis, new federal motor carrier safety rules, stricter California motor carrier emission standards, an improving economy that has increased transportation demand for dry goods and the typical summer spike in produce supplies — is resulting in higher freight rates.

Ken Gilliland, transportation manager at Western Growers Association, told The Produce News July 7 that the rates appeared to have leveled off a bit at a fairly high rate, but there is still concern because California summer fruit production has not hit its peak yet.

Paul Romero, a dispatcher with Gust Transportation Inc. in Fresno, CA, said on the same day that truckers were asking for about $2.50 per mile for long- haul produce trips. "Last year the norm was $1.60 to $1.70, rising to $1.90 when things got tight. The norm now seems to be about $2, with $2.50 being the top end."

Mr. Romero expects that the $2.50 rate, which equals about $7,500 for a cross-country trip, will be close to the maximum paid even as produce volume increases. “When you get higher than that, people start looking for alternatives. In fact, right now a lot of people are looking at using the rails. Their delivery times are pretty close and you don't have to pay that much.”

He said that the long recession has taken its toll by causing some carriers to go out of business and others to reduce the size of their fleets. “And with the new California regulations [on reefer units], some refrigerated trucks just aren’t coming into the state.”

Forest Landano of the James Brooks Co. in Fresno, CA, agreed that availability of trucks is tight in California. “We don’t haul back East, so I can’t speak to that, but trucks are tight out here even just to go in-state. There is just not a lot of equipment available.”

Dave Miedema, president of E. Miedema & Sons, a vegetable grower-shipper in Byron Center, MI, said that trucks are equally hard to find in the upper Midwest. “We use our own equipment for a lot of our hauls, but I know other shippers are having a hard time getting equipment. And at this time of year, I am usually handling a lot of calls from truck brokers looking for loads, and I’m not getting any of those calls this year.”

In the WGA advisory to its members, the group warned that an unstable transportation situation could exist throughout the summer. “We anticipate … that this summer will continue to be characterized by periodic transportation problems,” the advisory read. “In particular, the market will be especially difficult toward the end of each week, so whenever possible, secure your transportation capacity and rates well in advance of the shipment date.”