Archive For The “News” Category
Here’s four issues in the trucking industry to ponder – and you decide whether they are valid.
*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.
Growing Regulations
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.
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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
Up to 40 percent of fruits or vegetables can be wasted because it is “ugly”, a report on food waste reveals.
Produce grown in the UK that does not meet retailer standards on size or shape or is blemished is often used for animal feed or simply ploughed back into the ground even though it is edible, with as much as two-fifths of a crop rejected.
The Uk’s global food security programme, also showed that the average household throws away more than 11 pouinds of food a week, and nearly two-thirds of that waste is avoidable.
Households throw away a fifth of the food they buy, wasting it for reasons ranging from cooking and preparing too much food to not using it in time before the packaging due date expires.
Retailers respond to demands by consumers for high-quality food by imposing standards that can lead to much of the crop being wasted. However, some progress is being made with supermarkets marketing “odd shapes and sizes” for fruit and vegetables.
In developing countries, much of the loss of food occurs during post-harvesting storage, processing and packaging.
Tackling food waste globally is a major part of the action needed to provide enough food to feed a growing world population sustainably and tackle hunger, which affects one in eight people worldwide, the report said.
Around a third of food produced globally is lost or wasted.
“Over 5 million people in the UK live in deep poverty, where basic food provision is a daily challenge,” says food expert Tim Benton.
The report highlights priorities for research to help reduce food waste, including improving harvesting and packaging technologies, good seasonal weather prediction and new ways to reduce food waste within the home.
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.
Lettuce shipments from the Salinas Valley are expected to decline in coming weeks as the seasonal transition gradually shifts to the Imperial Valley in the California desert, as well as just to the East in the Yuma, AZ district. However, it will probably be around Thanksgiving before the change is completed. Sandwiched in between this the Huron district on the westside of the San Joaquin Valley. Lettuce shipments from Huron should get underway about the third week of October and last about a month.
Strawberry Shipments
The Watsonville area adjancent to Salinas is loading about 500 truck loads of strawberries weekly. There is much lighter volume coming out of the Santa Maria district, with Ventura County have very light movment as its fall season has just started.
Kiwfruit Shipments
Imports of kiwi from Chile and New Zealand are in a rapid decline, while California kiwi shipments are just gearing up. The California produce loads are predicted to hit about 6.5 million trays this season, down from 9-plus million trays last season.
California Nuts
No we’re not talking about California Gov. Jerry Brown, or the state’s assembly. California expects to load about 495,000 tons of walnuts this season, slightly below a year ago.
Date Shipments
California is the largest shipper of dates, with shipments forecast to be up about 20 percent this year, primarily from the California desert and Yuma, AZ.
Michigan could have a record, or at least near record apple crop this season, but there may be fewer loads available for produce haulers. In a nutshell, there’s not enough farm laborers and there are worries of fruit actually rotting on the trees.
Question. Unemployment is at 7.8 percentange, but some reports state it’s more like 17 percent when including people who have quit looking for work. So why is there a labor shortage? If there is a driver shortage amounting to 20,000 a year, as claimed by the American Trucking Associations, with unemployment so high, what’s the problem?
Could it be that government assistance has become so common and so excessive that folks figure why should they work when there are food stamps, free cell phones, housing assistance, etc.?
Michigan agricultural organizations teamed up to send “help wanted” postcards to more than 300 farm labor contractors, mostly in Florida and Georgia, informing them of the state’s large apple crop and need for hundreds of qualified workers for the next few weeks.
About 20 to 30 percent of the state’s apples remain to be harvested. If the fruit isn’t picked by early November there’s a good chance it will be lost.
Apple pickers are paid $15 to $20 and hour, plus are provided with housing during the season. The crop is estimated to be about 30 million bushels this season.
When it comes to driver respect, few people understand it better than Jimmy DeMatteis, and too many fail to practice what he preaches in this regard.
After all, he grew up with a dad who started hauling produce in 1951. His father eventually formed a brokerage in 1963 that eventually became Des Moines Truck Brokers. Jimmy has since became president of the company.
“Everything we do is useless unless we have a driver in that seat. When a driver walks into our office, our people (staff) get up, and walk over to that driver and shakes his hand. I’ve been in an environment where they see a driver and they get up and walk out of the room, or start staring at their monitor and suddenly start acting like they are busy,” DeMatteis says.
He believes the trucking industry needs to do a better job of recruiting, and that is only going to happen by making the driving jobs more attractive. First and foremost, he states that shippers and brokers alike need to recognize the value of drivers.
“I think produce shippers in general are one of the worst offenders. They tend to look at trucking strictly as a necessary evil. They fail to see it as an intregal part of the supply chain,” DeMatteis says, whose company expects to arrange about 9,000 loads this year.
He notes there are trucking jobs available where drivers can earn $50,000 to $60,000 a year, without having to be on the road for three weeks at a time. These are jobs “where you’re not treated like dirt.”
While DeMatteis sees plenty of room for improvement by shippers and brokers in their treatment of truckers, he also sees the other side of the coin.
“Some drivers with an 18 wheeler are driving 25 mph over the speed limit. They need to wise up and realize this is a profession. Some of these guys drive like they are reliving the NASCAR race they saw on Sunday. If you want to be treated like a professional, act like a professional,” he states.
Then he adds that there are too many “stupid” people driving four-wheelers as well.
While DeMatteis believes the majority of carriers are trying to conduct business the right way, he is critical of “the market squatters that are just trolling the load boards, waiting for the home run, and secure that $10,000 load from California to Boston (especially during the summertime peak produce shipping season).
He understands the market dictates rates, and the majority of time one is dealing with spot markets.
“The market squatters aren’t doing anything to be sustainable in the long run. They need to operate like a business. I’m not saying you should not take advantage of a market; everyone does. It is good business. But when you are churning and burning through customers, you can do that until there is nothing left. When I feel abused by a carrier, that’s the last guy I’m going to call when I need a load,” DeMattheis states.
He explains it is better when business is done right and you negotiate a fair rate, check one another out, provide the service, pay promptly and at the end of the haul you feel as if you can build upon a business relationship. There needs to be more of this in trucking, DeMatteis believes.
McDonald’s recently announced it would offer value menu customers a side of salad, fruit or vegetables as an alternative to French fries in the fast food giants top 20 markets, including the USA.
Additionally, McDonald’s said it would promote and market only water, milk and juice as the beverage for children’s Happy Meals and work to heighten kids’ interest in produce options.
Finally, the restaurant chain said it would have all of its advertising directed at children include a message about nutrition or wellbeing, as well as dedicated panels on Happy Meal boxes or bags.
The chain said it worked on the pledges with the Alliance for a Healthier Generation, which was created by the Clinton Foundation and the American Heart Association.
An independent, third-party assessor will be brought in by McDonald’s to track its progress on the commitment, which the company expects to roll out in up to half of the 20 markets within three years, completing implementation by 2020.
It’s a similar plan for healthier means recently announced by Burger King, which launched a low-fat, crinkle-cut French fry called Satisfries. The chain said the fries have 40 percent less fat and 30 percent fewer calories than the fries at rival McDonald’s.
McDonald’s said specific options for substitute menu items would vary by market.
A company filing bankruptcy is never good for anyone. In the produce industry there is the Perishable Agriculture Commodities Act (PACA) administered by the USDA, whereby creditors receive a certain amount of protection, and hopefully get at least a portion of the money they are owed repaid.
I’ve advocated for decades that product truckers be offered the same protections under PACA that are afforded those in the produce indutry. Under a bankruptcy truckers would be among the last in line to be paid, which usually means they will receive nothing.
I was reminded of this when Progreso Produce Limited I LP filed for Chapter 7 bankruptcy liquidation for the Boerne, Texas, business Sept. 30. The 40-year-old company is listing more than 60 creditors including many fresh produce companies.
The company is reported to have debts ranging from $1 million to $10 million. Assets of less than $50,000 are reported. The bankruptcy trustee notes there doen’t not appear to be any property available to the trustee to pay creditors.
River Ranch Closing
Meanwhile, produce, grower-shipper-processor of fresh vegetables, River Ranch Fresh Foods is closing operations. The Salinas, CA, based company will cease operations, effective Nov. 8.
Taylor Farms Retail will service retail value-added accounts beginning Nov. 9, plus Growers Express will handle all field-pack commodity requirements.
River Ranch, which was formed 34 years ago, was purchased by Taylor Fresh Foods three years ago with the hope of improving financial performance and regaining viability.
Consumer purchases have moved apples ahead of bananas into third place in total retail sales, trailing only berries and packaged salad in the 52 weeks ending May 29, according to Steve Lutz, executive vice president of Nielsen Perishables Group. Lutz said apples showed the biggest retail sales growth of any top major produce category, rising about 16 percent over the previous year.
Among the gains by various apple varieties with higher retail saies in the past year included pink lady, fuji, pinata, Honeycrisp, red delicious, ambrosia, Jazz, granny smith and gala, in addition to niche varieties such as Lady Alice, Envy, Opal and Junami.
The best apple consumers are willing to spend on healthy foods and fresh meals, and convenience and price are not a key purchase driver, Lutz said. With the income to afford choice, consumers are looking for unique flavors are driven to the category in pursuit of health, he said.
Despite challenges in the lackluster economy, Lutz said Nielsen data reveals fresh fruits showed an eight percent increase in retail dollar sales over the past year, accompanied by a 4 percent gain in volume. Produce is an increasingly important food choice for a majority of U.S. households.
Intrusive and excessive government regulations have been reported numerous times in HaulProduce.com and further proof of probably the greatest threat to the trucking industry, and particularly owner operators, comes from Dale Gray of Trenton, ON.
Dale is a veteran and drove a truck in the military before becoming a driver in civlian life in 1997. For over two years now he has been driving for Scotlynn Commodities Inc., of Vittoria, ON a Canadian transportation operation that has a sister company with several farms in Ontario and the USA that grows numerous items ranging from sweet corn to pumpkins.
Trucking both in the states and in Canada, Dale says American “rules are not as lienient.”
Although the hours of service regulations in both countries are similar, he prefers those in Canada because it allows him to be more profitable. For example, he can legally truck 13 hours in his country, compared to only 11 hours in the states.
“I prefer the the 13 hours driving time, because I can drive more hours. It makes a difference if you are paid by the mile,” Dale says.
He also notes he can split his sleeper berth hours by doing 8 1/2-hour increments during the day. In the US, the hours must be in 10-hour blocks.
“I can’t sleep for 10 hours,” he states. “Canadian rules are more user friendly.”
Speed limits are another matter, according to the 57-year-old driver. He notes Canadian speed limits in most of the country are 100 to 110 kilometers (65 – 70 mph). He prefers the higher American speed limits which range from 55 mph in California to 80 mph in Utah (75 mph in North Dakota where this interview took place).
Dale drives a 2012 maroon 386 model Peterbilt powered by a 485 hp Paacar MX diesel. The truck has a 60-inch sleeper with a 244-inch wheelbase and 13 speed tranny with overdrive. He pulls a 53-foot Utility trailer with a 2100 Advance Carrier refrigeration unit. Dale notes the reefer has a 120-gallon fuel tank that will run for a week.
“The reefer unit has a larger fuel tank so it can be shipped by rail,” he says.
Dale’s favorite thing about trucking is even though he is a company driver it is similar to being your own boss. “There is no one looking over your shoulder all of the time. In part of my military career, I was stuck in an office. I didn’t like that,” he states.
The worst part of driving is the attitudes of both four wheelers and truckers seems to have worsened over the years.
Dale hauls a lot of fresh produce grown by Scotlynn, plus he delivers a lot of frozen doughnuts and dry freight. On this particular day he was waiting to pick up a load of macaroni in Grand Forks, ND for delivery in Ontario.