Posts Tagged “independent truckers”

Part II – Allen Lund Co.: Freight Rates Not Keeping Up with Costs

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DSCN4660Kenny Lund doesn’t argue with the American Trucking Associations annual study, American Trucking Trends, which shows independent truckers and leased owner operators making $56,167 on average in 2014, which was 7 percent more income than the previous year.  However, the vice president of operations for the Allen Lund Company, a third party logistics provider, says freight rates still aren’t increasing enough and operating costs are high.

For example, gasoline in California is $4 per gallon, while Number 2 diesel is about $3.50 per gallon.  Take on excessive government regulations, plus an economy that leaves a lot to be desired, and Lund doesn’t see the freight rates keeping up with other costs.

“Truckers are making more money, but the rates aren’t up as much as expected, and the economy was expected to be much stronger,” Lund says.

He points out produce trucking is still dominated by companies with five trucks or less.

God bless the owner operators out there.  They don’t realize collectively what they do for this country and how important they are,” Lund surmises.  “We try to convey that as a company and treat these owner operators with the respect they deserve.  They are a critical component in the economic system of the U.S.”

He recently heard someone point out if all access to Los Angeles was cut off, there is only a four-day supply of food available.  Lund calls that thought “sobering” and notes people just do not realize what a great transportation system has been built in this country due to all of the small companies working together.

“With the efficient distribution system throughout the U.S., you can pretty much get strawberries anywhere in the U.S. the year around, and this is true with most major commodities,” he says.

ALC Logistics

As for Allen Lund Company, he is particularly excited about a division of the firm, ALC Logistics.  He developed the company’s Transportation Management System, building it from the ground up.  It is the first one created and provides software solutions ranging from claims management to freight audits, and carrier contracts, among other features.

“It is pretty exciting.  We are running about $1.4 billion through the system, working with the companies we have now, and we are just getting started,” Lund says.

As for the trucking industry itself, Lund is very interested in the development of driverless trucks.  For example the technology is now available where you can follow someone on I-40 from New Mexico to Arkansas and never touch the steering wheel.  He sees this addressing problems associated with hours of service regulations.

“I think we’re only five years or less away from it (driverless trucks),” he notes.

“If you can sell this to the driver by saying you are almost out of hours, then you put it on auto pilot.  The driver can then go to sleep while the truck is moving down the road, and have your hours still available when you arrive at destination,” Lund observes.  “It makes the single drivers like teams.”

(This is part II of a two-part series.  The Allen Lund Company was formed in 1976 by its namesake.  I have known Mr. Allen Lund nearly 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)








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