Posts Tagged “ELD”
Playing the spot market with freight rates on fresh produce is common with owner operators and small fleet owners. However, refrigerated fleets for years have often negotiated seasonal, if not year around rates.
The fleets see advantages to having more predictable produce rates with higher rates in the slower winter months, but lower ones during the peak shipping seasons of spring and summer.
However, record produce rates this past year has changed ways of doing business, not only for the fleets, but the produce shippers. For example, uncertainty surrounding freight rates has resulted in some Idaho grower-shippers of potatoes to shy away from quoting delivered prices for potato price contracts.
Sun-Glo of Idaho Inc., in Sugar City, has chosen not to take on the risk of volatile transportation rates by quoting delivered prices. The company has found trucking companies refusing to quote set rates, because of the uncertainties in trucking. If those fleets are unwilling to take the risk of contract rates, then the grower-shippers are not going to risk giving delivered prices.
Much higher truck rates have occurred, at least in part, by the implementation of electronic logging device (ELD) regulations last year. Higher truck rates is one of the biggest complaints of grower-shippers. Instead, companies such as Sun-Glo are quoting prices for their potatoes, something which they are in control.
Other shippers are doing business in a similar fashion. Wada Farms Marketing Group LLC of Idaho Falls, ID has indicated it may lose some customers this shipping season because Wada no longer is offering a delivered price contract. It has some contracts with trucking companies to haul potatoes, but it is on a month-to-month contract basis. Six month to one year contracts with truckers has become a rarity. Since Wade Farms cannot get seasonal or yearly contracts with trucking companies, it is avoiding offering delivered price contracts to customers.
Wade Farms has even inserted some flexibility clauses into contracts. For example. if there is an extreme shortage of trucks or holiday overages, it is not locked in to the same price.
Shippers have long complained of retail chains driving down prices on the produce they purchase. Potandon Produce LLC of Idaho Falls, ID has pointed out in the current truck rate environments, some retailers are looking to drive down f.o.b. prices to maintain delivered costs.
In a effort to cut shipping costs Potandon say if offers potato buyers a premium Idaho potato, or it can source spuds from 16 other states which may be closer to their customers. The company continues to seek alternative shipping methods to cut costs.
Potandon is still offering customers delivered prices and says it has the advantage of an in-house transportation department which is in constant contact with freight carriers to get the amount of trucks needed.
Thanks to Hurricane Irma there will be a significant drop in Florida avocado shipments this season. As much as 60 percent of the volume may have been lost.
Most shipments will be get underway during the first half of June. Caution is recommended to Florida avocado haulers to be aware of possible wind scarring of the fruit and make sure their receivers are aware of it. However, most shippers are contending fruit quality overall is good.
Brooks Tropicals of Homestead, FL points out avocado trees have shallow roots and were hit hard by the storm.
J&C Tropicals of Miami, FL expects volume to be slashed by roughly 50 percent because of the September storm that ravaged agriculture across the state.
Unity Groves Corp. of Homestead, FL may have lost 50 to 60 percent of its normal crop, with about 25 percent of its avocado trees were toppled by the winds/ The tree will be out of circulation for 2 to 3 years. The company started shipping at the beginning of June and has increased its avocado acreage about 15 percent.
New Limeco of Princeton, FL is just starting to ship with the crop about two weeks behind last season. Apparently demand is so high in South Florida for the first pickings of avocados, that few rarely get out of the county. By mid- to late June there are higher volumes with much wider distribution.
About 10 percent of Florida avocado acreage has been lost to laurel wilt since 2012, with diseased trees being removed and adjacent trees being taken out as well to try and slow the spread of the disease. The vector is the ambrosia beetle. Hurricane Irma likely exacerbated the effects of laurel wilt.
The electronic logging device (ELD) mandate also continues to affect produce companies across the country as some shippers say the requirements have made transportation more complicated and more costly.
By U.S. Department of Transportation
The U.S. DOT’s Federal Motor Carrier Safety Administration (FMCSA) today announced additional steps to address the unique needs of the country’s ag industries and provided further guidance to assist in the effective implementation of the Congressionally-mandated electronic logging device (ELD) rule without impeding commerce or safety.
The Agency is announcing an additional 90-day temporary waiver from the ELD rule for agriculture related transportation. Additionally, during this time period, FMCSA will publish final guidance on both the agricultural 150 air-mile hours-of-service exemption and personal conveyance. FMCSA will continue its outreach to provide assistance to the agricultural industry and community regarding the ELD rule.
“We continue to see strong compliance rates across the country that improve weekly, but we are mindful of the unique work our agriculture community does and will use the following 90 days to ensure we publish more helpful guidance that all operators will benefit from,” said FMCSA Administrator Ray Martinez.
Since December 2017, roadside compliance with the hours-of-service record-keeping requirements, including the ELD rule, has been steadily increasing, with roadside compliance reaching a high of 96 percent in the most recent available data. There are over 330 separate self-certified devices listed on the registration list.
Beginning April 1, 2018 full enforcement of the ELD rule begins. Carriers subject to Federal Motor Carrier Safety Regulations (FMCSRs) that do not have an ELD when required will be placed out-of-service. The driver will remain out-of-service for 10 hours in accordance with the Commercial Vehicle Safety Alliance (CVSA) criteria. At that point, to facilitate compliance, the driver will be allowed to travel to the next scheduled stop and should not be dispatched again without an ELD. If the driver is dispatched again without an ELD, the motor carrier will be subject to further enforcement action.
The Agency is committed to continuing the ongoing dialogue on these issues.
The waiver and guidance will be published in the Federal Register.
For more information on ELDs please visit: www.fmcsa.dot.gov/eld
Everyone is talking about the ELD mandate that goes into effect this December or potentially delayed to Spring 2018. From my perspective, the discussion centers on who will be compliant and who will not. We should be talking about how this simply enforces the Hours of Service (HOS) and its inane “one size fits all” solution that is bad for the industry.
To determine safety based just on the number of hours a driver is on duty and not take into account miles driven, conditions, places to park, loading/unloading procedures, experience of the driver, cross-country vs local deliveries and a host of other variables leads to a system that is unfair to the small cross country drivers who need some relief from the “system”. Hours of Service needs to be changed and the ELD mandate will only make the faulty HOS that much worse.
The biggest flaw in this system is drivers and carriers are compensated based on miles traveled, as almost every load booked has the revenue broken down into what the load pays per mile, but the compliance mechanism is based on HOURS in service. This will lead to drivers pushing harder to cover more miles in the allotted hours. This could lead to roads being less safe as drivers will be pushed to their limits.
But the regulators know better right? It turns out they do not. The FMCSA has been a terrible failure. The unintended consequences of their regulations have made the highways less safe. Just this past year highway deaths in crashes involving trucks have gone up 5.4%. This is a huge jump. After the FMCSA enacted their CSA safety program intended to make the highways safer, the steady decline of deaths on the highway per miles driven has reversed and we see a continual increase. CSA made a driver with 5 million miles in the driver seat but with some tickets or log book violations less valuable to a trucking company than a new driver with no violations. No consideration was made for the driver that had 5 million miles without an accident. The regulations made the driver with 5 million safe miles the enemy along with many of our best drivers in the industry.
Now the same situation is happening with ELDs. Experienced and safer drivers will leave the industry as they are displeased with the government regulators trying to control every little thing they do on the road. Less experienced drivers will push harder to “make their miles” based on the hours left on their ELDs. At a minimum, the ELD mandate should be delayed until HOS regulations are improved and more discretion is given to the professionals driving the trucks.
VP, Support Operations
Allen Lund Company
Kenny Lund graduated from Loyola Marymount University with a degree in Business Administration and managed the refrigerated transportation division in Los Angeles for eight years, before shifting full time into managing the Information and Technology Department in 1997; becoming the Vice President of the department in 2002. In 2014 Kenny started working with the ALC Logistics division to sell the ALC Transportation Management System (TMS) to companies that manage refrigerated and dry transportation.
Reprinted from ALC’s Carrier Connection, October 19, 2007, Issue #164.
“Name me a city or a state and I will tell you trucks have been tight,” states Bob Rose of the Allen Lund Company LLC.
Rose should know. He is the manager of the firm’s San Francisco office and has been with the transportation and logistics company 31 years. Based in LaCanada, CA, Allen Lund Company has 34 offices nationwide, working with 21,000 trucking companies, providing it with a keen pulse of truck availability.
The last three quarters of 2017 rates have been stronger, reflecting increased demand for equipment.
Allen Lund Company moves about 90,000 loads a year with a significant portion of this being perishables.
Rose doesn’t expect truck availability to improve any the rest of the year, and points out holidays such as Thanksgiving (November 23rd) always means increased demand for fresh fruits and vegetables and refrigerated trucks.
The ethnic population in the U.S. also is a factor with higher volume and demand for equipment to deliver product for their holiday observances.
“Not everyone can haul produce,” says Rose, in reference to the extra demands and knowledge required of drivers hauling perishables.
He also expresses concerns over the looming electronic logging device (ELD) requirement mandate, which the Commercial Vehicle Safety Alliance will begin phasing in December 18th unless it is delayed, as many hope. Plans to start using out-of-service criteria connected with the ELD mandate begins April 1st.
While the large carriers and their trucking associations tend to support ELDs, owner operators and small fleets often view it as limiting their ability to provide superior service, increases their costs of operation, and being another rule limiting their freedom of choice as professional drivers.
“Not a lot of the large carriers are hauling produce,” observes Rose. “Most of it is transported by owner operators and small trucking companies.”
He believes the tight truck supplies are resulting primarily due to the industry being at or near full capacity.
“We talk a lot about truck shortages, but with ELDs, we will feel it. But no one yet knows how ELDs will be enforced,” Rose says.
As a result, he notes Allen Lund Company is looking for ways to reduce the costly delays too often found at loading and unloading docks. They also are seeking improved routes for trucking since customers are maintaining lower inventories and want faster deliveries.
“I want to figure out how to pay drivers more so they can truck less and still support their families,” Rose concludes.