Posts Tagged “Allen Lund Co.”
I’m not sure where 2017 went, but ready or not I’m plowing right into 2018!
I’ve been very blessed in many ways, one of which is the way HaulProduce.com continues to have more folks signing up for our free subscriptions. This tells me you are finding worthwhile information here relating to produce hauling, as well as other news such as the health benefits of eating fresh fruits and vegetables.
There have now been over 1900 posts published on the website since it was launched on January 12, 2012. Six years! Where has the time gone!
The primary sponsors of HaulProduce – Allen Lund Co., Cool Runnings, and DMTB, I have personally known the owners a combined 105 years! They are all good, honest people that I can’t say enough good things about. The bottom line is they care about maintaining impeccable business reputations and they truly care about the trucking industry and particularly the hard working Americans that deliver well over 9o percent of the fresh produce to destinations across North America.
So, here is a shout out to 3 of the finest men I’ve ever known – Allen Lund, Fred Plotsky and Jimmy DeMatteis.
It looks like we are entering another cycle in the trucking industry. If you are old enough you have witnessed several of these over the years. The economy slows down, excess equipment is out there and freight rates plunge. Luckily, it looks like what started in 2017 is just really getting started with this new cycle in trucking. The economy is picking up, equipment and qualified drivers are harder to find, and freight rates are on the rise.
Of course, we can always count on the federal and state governments to put a damper on things, particularly with more rules, regulations and taxes, most of which seem to do more harm than good, and often increase costs of operation.
I continue to be amazed, especially with the owner operators and small fleet owners, that continue to persevere.
This is wishing each of you much happiness and health in the New Year. – Bill Martin
It was in early June that truck broker Kenny Lund saw the spot market on produce freight rates hit $10,000 for loads between California and the East Coast. While part of the reason was seasonal volume increases for fresh fruits and vegetables, and truck availability, he saw other factors contributing to the rise in rates.
Lund was speaking at the 2014 convention and exhibition of the United Fresh Produce Association in Chicago June 11th.
The vice president, support operations, for the Allen Lund Co. Inc. of LaCanada, CA cited the recently completed 72-hour U.S. Department of Transportation check points held across the country. This was delaying truck schedules.
Another factor was the CARB (California Air Resources Board) regulations, which Lund said were resulting in more truckers refusing to come to California. It takes a minimum investment by truckers of $8,000 to comply with CARB regulations.
“It is impossible to be compliant and move significant amounts of refrigerated product into and out California,” Lund stated
He noted less than 30 percent of refrigerated carriers are compliant with CARB and truckers simply do not have the money to become compliant.
In an effort to assist produce haulers, he noted Allen Lund Co. provides $1.5 million a week in advances to drivers.
Lund, who has been with company founded by his father and namesake 25 years, said there were over 50,000 carriers in the United States, but the average trucking company has less than six trucks.
“90 percent of the trucking companies have six or less trucks,” he noted. At the same time the percentage is very low of trucks having team drivers.
Getting more specific, Lund said refrigerated carriers are dominated by owner operators and companies with less than five trucks.
As for CARB, Lund said he has “fought tooth and nail with them” (California bureaucrates). Since the CARB rules were implemented in 2004 fines have been extended to brokers, shippers, receivers and specifically to drivers.
“It (CARB rules) has driven a lot of drivers away from California,” Lund stated.
He also was critical of hours-of-service regulations, and particularly the 34-hour restart. While the restart requirement may be okay for local trucking, it is not good for long haul drivers.
During a question and answer session, Lund said the reason more large refrigerated carriers do not haul produce is because “it comes down the driver having a stake in that load. I see a lot of large carriers get in and out of hauling produce. It comes down to not having enough good drivers,” Lund concluded.
In recent years there has been increased interest by shippers in using the rails to deliver fresh produce, in part spurred by the increasing costs of trucking.
This is nothing new since various types of rail service, whether using refrigerated rail cars or piggy trailers, has been tried since at least the 1970s. But after a long lull, some new services have been introduced. We’ll get more specific on these in a future feature story. For the time being, here are some observations by veteran individuals whose focus is on transporting fresh fruit and vegetables by truck, and their take on the efforts to increase rail service.
Kenny Lund, vice president of the Allen Lund Co. of LaCanada, CA notes rails only account for one to two percent of the fresh produce being shipped. There are only so many tracks and it would take billions of dollars worth of equipment to increase produce volume rail to say, four to eight percent.
“Refrigerated rail is increasing,” Lund notes. “They are doing more with wine, dairy and more temperature controlled products. But we don’t see a massive shift to rail and don’t see a pathway to do that.”
Fred Plotsky is president of Cool Runnings LLC of Kenosha, WI. He says new services such Rail Logisitics Cold Train, a rail operation based in Overland Park, KS, bases its freight rates on truck rates.
“The rails understand the market and they are taking advantage of it. Cold Train….will set a rate of say $3600 when the truck rate (to the same destination) is $4000,” Plotsky observes. Then when the truck rates increase to $4500 or $4600 Cold Train will increase its rates accordingly.
“Their service (Cold Train) is good and you can load them Monday for delivery Friday 0ut of Washington or California to Chicago,” he says.
However, Plosky adds if a shipper has a mixed load of produce spread out over 100 miles with three pick ups you are not going to use that rail service. Now if the rail service involved is a straight load or two pick ups in the same town, that is feasible.
At Des Moines Truck Brokers in Norwalk, IA, President Jimmy DeMatteis says they have working relationships with companies using the railroads.
“But there have been problems with claims. With some loads the rails don’t want to take responsibility for it. There’s not enough rail equipment yet and the rail infrastructure is poor. But the rails are making inroads,” DeMatteis says.
Lund at Allen Lund Co. adds, “The rails don’t like produce and they don’t like the claims that come with it. They won’t go out of their way for produce like they will wine and other temperature controlled items. What the rails like is consistency. Produce is opposite of consistency, because growing regions change, and demand changes. The rails build their world around schedules. The rails and trucking are major competitors, and the rails don’t want to do anything to help trucking.”
Doug Stoiber is with Raleigh, NC-based L&M Transportation Services. The company vice president had expected a “greater impact” from rail related companies such as Railex LLC of Rotterdam, NY, that partners with the Union Pacific Railroad and CSX Transportation.
“Railex is successful and they are growing and they are encouraging some competition. I’m surprised they haven’t taken more truck loads of freight off the highways than they have,” Stoiber states.
He notes 98 percent of all consumer goods are delivered by truck and about 95 percent of produce is handled by truck. Stoiber says while the rails can take a lot of long haul produce off the highways, instead of “eliminating” transportation, it tends to “re-arrange” the movement of product.
“You still have to pay (a truck) for that first mile and the last mile, because the rails can’t deliver to the store doors or distribution centers, at least not yet. The cost comparatively for that first mile and that last mile is a lot higher than if it is delivered from shipping point to destination on a truck,” Stoiber says.
How green is green when it comes to enviromental issues and dedication to those issues? Is the size of that so-called carbon foot print what it appears? While it can be a mixed bag, what is certain is that truckers are being affected by changes and polices.
For example, one of the biggest changes coming sooner than we may think is noted by Doug Stoiber, vice president of L&M Transportation Services, based in Raliegh, NC.
The LMTS executive states, “Within the next couple of years we’re going to see a whole lot more trucks switching from diesel fuel to liquid natural gas and compressed natural gas. That is going to have an impact on the environment and sustainability and fuel costs.”
Currently the fuel delivery industry in playing catch up, he notes, in developing the infrastructure to service natural gas trucks. Stoiber points out truck manufacturers are lining up to purchase the the new 12 liter Cummins natural gas engine.
Jimmy DeMatteis, president of Des Moines Truck in Norwalk, IA agrees.
“I’m seeing more natural gas trucks, It’s supposed to burn cleaner than diesel engines that are five years and older,” he says, “and are certainly burning cleaner than the seven years before that.”
But there’s another side to the “green” issue that often doesn’t receive the attention.
As the president of Cool Runnings LLC in Kenosha, WI, Fred Plosky makes an observation about the produce industry and how it sometimes approaches transportation from an envirnomental stand point.
“…their (produce) buying intiative isn’t nessarily in agreement with their corporate initiative,” Plotsky observes.
For example, he had a couple of customers that requires Cool Runnings to be a part of Smartway, a voluntary environmental program for trucking.
“While they are saying you need to be a part of Smartway and you need to watch your carbon foot print, they don’t run their business that way,” Plotsky relates.
A Cool Runnings hired truck has had to run an extra 100 miles out of route to pick up nine packages of fruit, because the buyer was wanting to buy the fruit direct (from the shipper) and save money.
“The buyer won’t consolidate this to two pick ups in the same town and then buy those nine boxes off the street (from a wholesaler) in Chicago for an extra $3 a box, as opposed to routing the truck and paying $255 for going up (to the shed) , $55 for the pick up and paying $310 more for those nine boxes. What does that do for your carbon foot print?” Plotsky asks.
Kenny Lund, vice president of the Allen Lund Co. in LaCanada, CA says another anti-environmental policy relates to each state having a different fuel blend. He says this is “killing the refineries” and there needs to be a national fuel blend when the conversion is made twice a year for summer and winter weather.
“There is something like 28 different fuel blends across the U.S.,” Lund states. “You have got refineries serving multiple states. They have to shut down production and reformulate it. That just drives up the cost for everyone.”
Lund recalls a trucker who said it best when it comes to the rules and regulations affecting transportation.
“You have got a lot of people making regulations for the trucks that have never been inside a truck.”
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