Between the railroads and government Paul Kazan sees a possible conspiracy against the trucking industry, and the effects on the transportation of fresh produce.
He is celebrating his 30th anniversary in the founding of Target Interstate Systems Inc., a Bronx, NY- based truck broker, although the celebration would be even better if so many “arrows” from many directions weren’t being shot at trucking. Whether it’s the rails, or intrusive federal or state rules and regulations, or the public, the challenges for truckers seems to worsen.
“The (trucking) industry is on the defense. It is under constant attack from the rail industry, the public sector and it is kind of a lightning rod for all the ills of pollution and unsafe driving,” Paul contends. “It has the image of being environmentally unfriendly.”
Paul observes the railroads are getting better at doing different things, whether it is logistics, or lobbying for issues which adversely affect trucking, such as hours of service.
While the trains are moving for loads of certain types of produce, he notes they are incapable and not interested in handling the LTL type loads that are becoming more prevalent.
“The rails are not making four or five pickups and taking two days to load. That’s the trucker’s lane. For those truckers that want just one pick up, one drop, you are not going to get the money you want,” he says.
Paul points out there are places such as Michigan, the Midwest and the southeast where trucking really excels because the rails cannot compete.
He points to all the government created red tape in California with its CARB (California Air Resources Board), the federal CSA-2010 rules, plus attempts to limit the hours truckers can legally drive.
“If I wanted to be a conspirator, I’d say there is a very strong rail lobby out there trying to slow trucking down, while they pick up the speed of the trains, and increasing the cost of trucking,” he states.
Because of the perishable nature of produce, Paul says hauling fresh fruits and vegetables requires “running on the edge of legal limits.” For example, he cites the California CARB rules in which his company as well as everyone else involved in the transaction of a load, must be in compliance or possibly face stiff penalties.
“From California, we expect a driver to make a New York delivery in four days, five days at the most. They (government) don’t care about the fact a truck arrives at a (loading) dock and has to wait four hours to get loaded. He’s not off duty then. He’s on duty. Nobody considers you arrive at Hunts Point and it takes 10 hours to get unloaded. That is on duty for the trucker. I find that the hours of service rules are killing the drivers,” he states.
Paul says all these challenges faced by truckers are only contributing to a driver shortage. It is estimated the trucking industry will be short 200,000 drivers this year alone.
Because of the poor economy, Paul notes there are fewer carriers. When the economic conditions improve he sees a real scarcity in qualified drivers. Between having less equipment industry wide and not enough drivers, he sees rates increasing when the economy improves.
At the same time, Paul notes owner operators are finding it difficult to get financing for new equipment.
“We are all waiting for the economy to rebound so we can do things. It’s not easy,” Paul observes. “The majority (at least 75 percent) of people we work with own two to five trucks and generally the owner is driving one of them. Our pay practices are immediate (upon delivery and submission of paperwork). We wire the money to our carriers. Most of our guys (truckers) do take advances and we charge a modest fee. While profit may be king, cash flow rules,” Paul says.
With headquarters located on the Hunts Point Wholesale Produce Market, Target arranges about 15,000 loads of produce and dry freight annually. He notes the dry freight side typically pays less, is slower paying and does not provide advances. As a result, he notes the produce loads are helping finance the return trips.
On a side note, Paul made an interesting observation regarding earlier this year when there was the threat of a longshoreman’s strike on the East Coast.
“I was very much looking forward to a strike,” he states. “That would be the biggest shot in the arm you could possibly imagine. The big box stores were already making diversions (of imported products) from the East Coast to the West Coast in anticipation of the strike. That would have meant the Home Depots, the Wal Marts would have had to truck that merchandise from the West to East Coast.”