In transportation, as well as fresh produce circuits, Doug Stoiber is known for his keen insight into the state of the trucking industry. As vice president of produce transportation operations for L&M Transportation Services, Inc. based in Raleigh, NC, Doug recently shared some insights into how truckers are doing, made some obervations on increasing government regulations and chided political mauverings from politicians.
LMTS does $100 million annually in business and last year arranged 28,000 loads, of which about 70 percent were fresh fruits and vegetables.
Concerning the financial health of the trucking industry, Doug describes it as just “okay.” Although he sees freight volumes picking up some, the economy is still struggling to get much momentum.
“The transportation industry lives and dies with the construction industry,” he observes. “That is what keeps a whole lot of trucks moving. When they (drivers) deliver building materials, they (return) load with produce, nursery and all kinds of things.”
Doug is observing modest increases in the amount of westbound freight involving construction materials and some Asian imports. However, he continues to see depressed rates on westbound freight, in part because eastbound produce loads pay so much more.
About 30 percent of LMTS’s business is with dry freight loads and LTL.
“On the produce (transportation) side of our business, the owner operators and the small fleets are always going to be the mainstay of this business,” Doug relates, “because of the the way crops move around (seasonally) and the unique nature of fresh produce. The business model of owner operators are best suited to move that kind of freight.”
As for its dry freight and LTL business, LMTS relies more heavily on larger fleet operations and contract carriers.
He notes it was in 2008 when the nation’s economy collasped. This resulted in a downsizing of the trucking industry as many trucking companies were forced out of the business. It was the strong carriers that were able to withstand the economic downturn and it is these same operations that will benefit as more freight becomes available and shippers compete for the services of the remaining trucking companies.
While this will mean some freight rate increases, Doug cautions there is a down side.
“(The rate increases) will be offset by the higher costs due to more regulations. The states and the federal government are trying to increase taxes on people who buy fuel, people who use highways and on people who work in the state of California.”
He says two of the biggest concerns with trucking regulations relate to hours of service and CARB (California Air Resources Board).
The federal government is set to finalize its rules on hour of service relating to reset time and mandatory rest periods. He sees this translating into less time trucking per driver, which will require more drivers to be hired, resulting in higher costs of operation.
As for new CARB regulations that became effective with the New Year, he points out all parties involved in the transportation can be fined if there is a violation.
For example, if a carrier misrepresents itself to LMTS and is fined for not having a refrigerated unit that is 2007 or newer, the transportation broker can be fined, as well as the carrier, shipper and receiver.
Highways
When it comes to infrastructure, Doug doesn’t hear a lot of complaints from drivers. However, when he reads the newspaper, people are constantly complaining about the poor state of the highways and bridges.
“I don’t know whether they (politicians) are seeing something we’re not, or whether they are just legislating for more taxes, because they are working the public to try and create a situation that is bigger than it really is. I think the primary concern with infrastructure is the states going to toll roads,” Doug states.
For example, he notes the Pennsylvania Turnpike has raised tolls and since then commercial vehicle traffic has declined. This is because carriers are taking other routes to avoid the turnpike and save money. This results in freight not moving as fast or efficiently as it should.