Part I – Allen Lund Co.: Reasons for Flat CA Produce Trucking Rates

Part I – Allen Lund Co.: Reasons for Flat CA Produce Trucking Rates

DSCN4660Many folks involved in fresh produce transportation are wondering what is going on in California.  Despite the state growing and shipping about one-half of the nation’s fruit and vegetables, rates have remained relatively flat during the heaviest volume period of the year.

In search of answers, we turned to Kenny Lund, vice president of operations for the Allen Lund Company of La Canada, CA, a transportation brokerage and logistics company that has been in business nearly 40 years.

“I think we’re in a historic…incredible shift in produce,” Lund states, “where product is being grown where it hasn’t been grown before.  It’s hard to get the numbers, but it’s looking like there’s a 20 percent increase in produce from Mexico.”

He also cites production and shipping increases from Canada, as well as boat arrivals with imported produce from around the globe.

“But there is not an increase from the most fertile land in the world (California); there’s a decrease,” Lund contends.  “I think the decrease is more significant than people will say.”

While acknowledging the drought has a lot to do with it, Lund sees an attack by environmentalists on the California agricultural industry as being a factor.  He points to cuts in water allocations to agriculture and water going elsewhere due to environmental reasons.

He says there has been somewhere between 400,000 and 800,000 acres of California farm land being placed out of production.

“It is political more than anything,” Lund states.  “They build pipelines for everything, but for some reason we can’t do it for water.  You keep seeing a reduction of water in California and an increase in people (living here). The drought is more political than the actual drought.  There is  a lack of water going to the farms.  The Columbia River going into the ocean is enough in itself to handle California farming needs.  But the environmentalists will not let that happen.”

Similar to a statement Lund has made many times about the over regulation of trucking, he says the excessive regulation of farms is “amazing.”  For example he recently talked to someone in charge of compliance with a California farming operation and was told she had to answer to 42 different government agencies.

Lund believes this a contributing factor to Allen Lund Company having more produce loads than ever crossing the border from Mexico into California, Arizona and Texas.

“It’s a contradiction.  50 percent of the nation’s produce is grown in California.  That is under attack by a lack of water due to over regulation of farming, as well as trucking,” Lund says.  “Government is over regulating diesel engines, farming equipment, pumps; all these things are under severe attack.”

Each of these factors are contributing to what he calls a “historic” shift in produce shipments from California.  Lund talks of the Autopista Durango-Mazatlan, a 143-mile highway spanning from the growing regions of west Mexico to Texas ports of entry that opened last year.   As a result business in McAllen, Tx is booming.

While California produce trucking rates are remaining rather flat, Lund says rates are up significantly in Texas, New Mexico and Arizona.  At the same time, Florida is “mixed” because it has a very similar growing and shipping season to Mexico with which it competes.  Still, he notes Florida does not have nearly as many regulations, plus that state has plenty of water.

(This is Part I of a two-part series.  The Allen Lund Company was formed in 1976 by its namesake.  I have known Mr. Lund almost since the founding of the company.  His son Kenny Lund joined the company 26 years ago this month.  At that time the operation had 32 employees.  Today Allen Lund Company has 500 employees, arranges about 250,000 loads a year, of which about 40 percent is with fresh produce.  The company has 30 offices nationwide and will soon break the $500 million mark in annual sales. — Bill Martin)