Posts Tagged “California Resources Board”
Changes in federal hours of service regulations, along with stricter rules by the California Air Resources Board (CARB) are two primary reasons refrigerated produce loads have increased this year by as much as 10 percent, according to DAT Solutions, a load board network based in Beaverton, OR, as reported recently in The Packer, a weekly national trade newspaper.
Over 99 million transactions annually are made and company bases rate estimates on $24 billion of freight bills, according the DAT website.
The hours-of-service changes require drivers to stop for rest breaks more often, meaning it takes longer to reach destinations such as distribution centers, many of which were located years ago based on drive times allowed under the old regulations.
Some (truckers) have gone to a relay system where the first one drives so far, then another driver picks up the trailer and takes it on. The downside, particularly with temperature-sensitive loads like produce, is that you don’t have the continuity of one driver taking care of the load for the whole trip,” Montague said.
Higher rates also are attributed to the tightening rates emissions regulations by CARB, which apply not only to trucks picking up and delivering produce in the state, but those merely driving through California.
Montague said as of early June, many of the highest rates in the nation were for trucks going into California. The data for the week ending May 31 showed per mile rates of $2.44 in California for reefers. “At least 90% of the fleets that haul fresh produce have 10 trucks or less,” Montague said, adding that many produce haulers are individual owner-operators with only one truck. “The changes in regulations really make it hard for the smaller operators because of the costs for upgrades. The overall message is a lot of smaller truckers are having trouble.”
*The driver’s shortage is a hoax.
*One of the last concerns of large fleets is the well being of owner operators and small fleet owners.
*Regulations are killing the deregulated trucking industry.
*California produce rates have been lower in recent years and the reason may be different from what you think.
These four statements came to mind following a telephone interview with Kenny Lund, vice president of Allen Lund Co.
Is There a Driver’s Shortage?
When it comes to a driver’s shortage relating to fresh produce, Lund sees the only shortages being at shipping point and at the receiving end These involve short hauls from the field to packing houses and from receiver distribution centers to retail stores, restaurants, etc. But he doesn’t see a driver’s shortage with long haul produce transporation.
Lund concedes there may be a shortage of drivers with the larger trucking companies, stating, “if you have 300 trucks you have to come up with 300 drivers to fill them.” However, produce transportation is dominated by owner operators, who is the driver of his own truck. He doesn’t have to recruit other drivers.
Large Fleets Hurting Owner Operators?
“It seems the larger truck lines are doing everything they can to make it tougher on owner operators,” Lund states.
As examples, LaCanada, CA-based Lund points to big carrier support of everything counter to issues of importance to owner operators. He cites large fleet support of Electronic Onboard Recorders (EOBRs ) that will add costs, and support of California Resources Board (CARB) rules. Why?
Lund points out large carriers tend to rotate their fleets every five years and it is the owner operators who are buying their used trucks. This wouldn’t be so bad except the CARB rules require equipment such as reefer units not to be older than seven years.
“You have to retrofit it for a cost of anywhere from $8,000 to $20,000,” Lunds says. On the plus size, he adds the fleets are starting to realize the CARB rules are not only bad for owner operators, but for the whole trucking industry. Lund believes the damaging CARB rules are a much bigger threat to the industry than a driver’s shortage.
Perhaps the biggest threat to the survival of owner operators are the growing number of federal and state regulations.
“When you produce all these regulations on an one-horse operator, he doesn’t have the resources to comply with everything,” Lund states. “It’s really putting a strain on them.”
Why Have California Rates Been Lower?
Lund notes California produce rates have not been as high in recent years. At the same time he is noticing more truck shortages, but not in California.
“There’s just not as many trucks in California now. What has kept the rates down is there is not as much produce (being grown in California),” Lund contends.
It comes down to California’s intrusive regulations, etc. are also resulting in more produce growers shifting their operations to Mexico where the red tape and costs of operation are less. For example, similar to California, there is less produce being grown in the Lower Rio Grande Valley of Texas, yet more truck shortages are occurring there, as more Mexican grown fruits and vegetables are being shipped into South Texas.
These issues are presented to you following a telephone interview with Kenny Lund. I have known Kenny’s father, the namesake of the company since shortly after his modest beginning in 1976 as a truck broker . Today, the company works with over 20,000 carriers, which are mostly owner operators. ALC arranges about 200,000 loads a year, with food items accounting for over 50 percent of the freight. Refrigerated loads make up about 40 to 45 percent of the loads.
While Allen Lund remains involved in the company, Kenny Lund has assumed a greater role in the continued growth and success of the operation. At the same time, the high ethical standards put in place by Allen nearly four decades ago, remain rooted in the company’s foundation. — Bill Martin
When you are headquartered on the East Coast near much of your customer base, but about one-half of the nation’s fresh fruits and vegetables are grown and shipped from California, the 3,000-mile hauls can present additional challengeover shorter runs. But when one adds the challenges of dealing with federal and state mounting regulations, it just makes doing business more difficult.
Rob Goldstein is president of Genpro Inc. of Newark, NJ and arranges loads of fruit and vegetables from various shipping points around the country, including California. Because of the ever changing and increasing number of rules and regulations, he maintains more team drivers are needed on the road to help meet delivery schedules.
As an example, Goldstein cites the changes in the hours of service rules last July, which in effect reduces the amount of driving time a trucker can legally perform.
“The bottom line is with the new hours of service, and what the truckers can do, if they can’t make more turns in their line hauls, the rates are going to have to go up. Drivers have to drive less hours under the new rules and this results in fewer turns,” Goldstein says. “Drivers get paid for the amount of miles they travel and they are logging fewer miles with these new hours of service.”
On the state level, Goldstein references the California Resources Board (CARB) rules as a hinderance to trucking.
“The average carrier has six or seven units. So we are asking these carriers to comply with the state of California where about 50 percent of the domestic produce production originates,” he notes. “They (California officials) are asking these guys to make significant investments in their equipment, which isn’t easy to do.”
That is a reference to CARB requiring trucking equipment be retrofitted when it reaches seven years old.
As owner operator Henry Lee of Ellenwood, GA says, it will cost him $10,000 to replace the motor on his Thermo King SB-310 reefer unit, to meet the CARB requirements.
Genpro works with a mixture of owner operators, small fleets and carriers. Goldstein says the average size of fleets they work with is about seven units.
One truck owner Henry Lee has pretty much told the state of California they can take their loads and shove ’em. Well, not exactly. But the old Johnny Paycheck country hit (Take This Job and Shove It) seems to apply here.
Henry is a veteran driver who became an owner operator six years ago and has never looked back. He does what is best for his business, and one of those decisions has been to avoid trucking in California. It’s just not worth it to him.
The trucker owns a 2001 Peterbilt, pulling a 2006 refrigerated trailer.
“The California (Air Resources Board) rules are not fair. My reefer unit works fine and I have no problems with it,” he states. However, California certainly does. Under the state’s CARB rules his seven-year-old refrigeration unit has to be replaced no matter how well it is working.
“My trailer and the motor on my SB-310 (Thermo King) reefer unit are still in good condition. This refrigration unit should be good for another three years. My truck also is in good condition,” Henry says. “To replace the motor on my reefer unit would cost $10,000.”
He had recently spent $14,000 for an overhaul on his 500 h.p. Caterpillar C15 diesel.
“I like Cat engines. They have got power and they are dependable. I call it American power,” Henry says.
The resident of Ellenwood, GA has been trucking since 1997, never has pulled a dry van, and he has always hauled refrigerated loads, including plenty of produce.
“I have quit going to California because of the excessive and unfair rules and regulations there. Now, I am running between the northeast and southeast United States,” he says.
Henry says he never regrets becoming an owner operator.
“If I want to take a couple of days off, I can. If the load does not pay well, I can decline it. There is just a lot more freedom as an owner operator,” he states.
Henry is currently leased to a carrier, but is planning to have his own operating authority within the next few weeks.