Posts Tagged “Bill Martin”
Kenny 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)
Many folks involved in fresh produce transportation are wondering what is going on in California. Despite the state growing and shipping about one-half of the nation’s fruit and vegetables, rates have remained relatively flat during the heaviest volume period of the year.
In search of answers, we turned to Kenny Lund, vice president of operations for the Allen Lund Company of La Canada, CA, a transportation brokerage and logistics company that has been in business nearly 40 years.
“I think we’re in a historic…incredible shift in produce,” Lund states, “where product is being grown where it hasn’t been grown before. It’s hard to get the numbers, but it’s looking like there’s a 20 percent increase in produce from Mexico.”
He also cites production and shipping increases from Canada, as well as boat arrivals with imported produce from around the globe.
“But there is not an increase from the most fertile land in the world (California); there’s a decrease,” Lund contends. “I think the decrease is more significant than people will say.”
While acknowledging the drought has a lot to do with it, Lund sees an attack by environmentalists on the California agricultural industry as being a factor. He points to cuts in water allocations to agriculture and water going elsewhere due to environmental reasons.
He says there has been somewhere between 400,000 and 800,000 acres of California farm land being placed out of production.
“It is political more than anything,” Lund states. “They build pipelines for everything, but for some reason we can’t do it for water. You keep seeing a reduction of water in California and an increase in people (living here). The drought is more political than the actual drought. There is a lack of water going to the farms. The Columbia River going into the ocean is enough in itself to handle California farming needs. But the environmentalists will not let that happen.”
Similar to a statement Lund has made many times about the over regulation of trucking, he says the excessive regulation of farms is “amazing.” For example he recently talked to someone in charge of compliance with a California farming operation and was told she had to answer to 42 different government agencies.
Lund believes this a contributing factor to Allen Lund Company having more produce loads than ever crossing the border from Mexico into California, Arizona and Texas.
“It’s a contradiction. 50 percent of the nation’s produce is grown in California. That is under attack by a lack of water due to over regulation of farming, as well as trucking,” Lund says. “Government is over regulating diesel engines, farming equipment, pumps; all these things are under severe attack.”
Each of these factors are contributing to what he calls a “historic” shift in produce shipments from California. Lund talks of the Autopista Durango-Mazatlan, a 143-mile highway spanning from the growing regions of west Mexico to Texas ports of entry that opened last year. As a result business in McAllen, Tx is booming.
While California produce trucking rates are remaining rather flat, Lund says rates are up significantly in Texas, New Mexico and Arizona. At the same time, Florida is “mixed” because it has a very similar growing and shipping season to Mexico with which it competes. Still, he notes Florida does not have nearly as many regulations, plus that state has plenty of water.
(This is Part I of a two-part series. The Allen Lund Company was formed in 1976 by its namesake. I have known Mr. Lund almost 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)
There is angst among some in the Canadian produce industry because the rules set up by an entity of America’s U.S. Department of Agriculture (USDA) has changed some rules regarding protection they receive when there is a dispute involving a produce transaction. However, it could be worse. What if the Canadians had absolutely no protection against unfair practices, something U.S. produce truckers have never had.
The U.S. government recently took away a trading privilege from Canadian produce companies that has been available for more than 75 years. The result is fruit and vegetable producers risk losing thousands of dollars, closing their businesses, or moving across the border into the U.S.
Canadian produce companies that were owed money from U.S. companies could pay $100 to start a legal process, under the Perishable Agricultural Commodities Act (PACA). This would happen when U.S. companies didn’t pay their bills on time, at all, or when the company declared bankruptcy.
However, in October 2014, the United States withdrew Canada’s privileged access to PACA after the Canadian government neglected to implement the same privileges this side of the border. Now Canadian fruit and vegetable producers have to pay double the amount of money they’re owed to get access to the unpaid funds. If they’re owed $100,000 for cucumbers for example, they have to pay $200,000 as a bond to get the process started.
For decades, this writer has advocated owner operators, small fleets and large fleets hauling fresh fruits and vegetables be afforded similar protections the USDA’s PACA provides for the produce industry. This would be invaluable for produce truckers facing unfair claims or deductions or rejected loads. However, the produce industry has always fought against such measures and the PACA has certainly shown no interest.
About the only recourse for produce haulers is going through the court system, which can be costly, time consuming and particularly difficult considering the fact the problem may have taken place thousands miles from the trucker’s home base. Otherwise, hope and pray you have a good truck broker or shipper backing you when such issues arise. — Bill Martin
My first visit to the Hunts Point Terminal Produce Market was in February 1989. Over the past 25 years I have visited the world’s largest produce wholesale facility more than 50 times.
Having been to most of the nation’s major wholesale produce markets, New York City’s South Bronx mammoth is the most fascinating. Being so large it has the most activity, the largest volume of trucks – and produce – moving in and out of the market.
Whenever possible, I enjoy visiting with owner operators, small fleet owners and company drivers who are at Hunts Point. I’ve heard the stories of excessive long delays waiting to unloading, because a receiver is using their reefer unit as a free warehouse. I’ve been told about the unfair claims truckers face, especially on loads that have lost market value from the time it was bought until it arrives at destination. There also are complaints about the $20 gate fee, however, these are often included anymore as part of the freight rate.
While these problems still exist at Hunts Point, it seems I’m finding fewer trucker complaints. Granted, I am only able to talk with a minute percentage of the 130,000 truckers that go the market each year.
However, as transportation costs increase, and good, dependable service becomes more of a premium, it seems more produce receivers than in the past appreciate receiving a delivery on time and in good condition. In other words, you pay for what you get.
Trucks are in greater demand than ever. You hack off a driver, and he or she has other choices. They don’t have to deliver to Hunts Point or anywhere else. In talks with drivers at truck stops and other places, I used to hear as often as not, they simply would not go to Hunts Point because of traffic, gridlock, tolls and yes – treatment at the docks. I don’t hear it as often as I used to.
Hunts Point only has about one-third the number of wholesalers on the market compared to when it opened in 1967. I like to think that while the consolidations, mergers and acquisitions have resulted in fewer, but larger merchants – hopefully their growth resulted from good, honest businesses practices.
For whatever reasons, Hunts Points is a pretty interesting place to visit. — Bill Martin
(This is the last of a four-part series based upon my visit to Hunt Point on Dec. 4, 2014)
At the Hunts Point Terminal Produce Market there are four long rows. On the ground floor are the sales offices and docks. Upstairs one can stand at one end of a hallway one-third of a mile long and the other end is so far away the walls, floor and ceiling appear to come together. On each side of the massive hallway are the offices of the wholesalers.
In 1967, the new Hunts Point produce market had 125 wholesalers receiving fruits and vegetables. Today, due to mergers, consolidations and companies falling by the wayside, there are only 40 wholesalers, although their operations tend to be much larger than in the early days.
The largest company on the market is D’Arrigo Bros. Co. of New York Inc., which has 30 units. However, it is even larger when considering the family owned operation also has 30,000 acres of farming in California and Arizona. At the same time D’Arrigo and other wholesalers service thousands of produce buyers from all walks of life on a daily basis.
In some form or another, they all are dependent on the reliable service of the trucking industry to be successful in their own businesses.
I’ve known Matthew D’Arrigo, vice president of D’Arrigo Bros. for nearly 30 years. The company has a great reputation not only in the produce industry, but with produce truckers who have delivered product to the operation. D’Arrigo knows the livelihood of the company depends in part on good, reliable service from produce haulers. His company treats truckers accordingly.
He speaks of the continuing rise in costs of transportation and recalls late June 2014 when some produce rates from California to New York City hit $10,000. Many produce folks who pay the freight rates don’t necessarily like the higher costs, but rationalize their thinking knowing their competitors are pretty much paying the same rate for a truck.
Wholesalers at Hunts Point tend to depend upon truck brokers and logistics companies to handle their transportation needs. Most wholesalers simply don’t have the time, expertise or inclination to arrange the trucks themselves. — Bill Martin
(This is the third of a four-part series based upon my visit to Hunt Point on Dec. 4, 2014)
When the Hunts Point Terminal Produce Market opened in the South Bronx of New York City nearly half a century ago, there were high hopes it would be a rail delivery heaven. Even to this day, there are still those who have that dream.
When the 113-acre produce complex opened in 1967 plenty of receivers were anxious to try trains attracted to the lower freight rates. However, within five years, there had been a dramatic drop in rail usage. As late as 1972 Salinas Valley produce companies were shipping vegetables to Hunts Point via rail. Today, no Salinas Valley veggies are transported on tracks.
Hunts Point had become notorious for claims, whether justified, or not. Many of those claims no doubt were justified, because it was taking the rails so long to deliver the highly perishable produce. In reality, wholesalers using rails were shifting heavily towards trucks after WWII and this only excelerated as the interstate highway system development began in the 1950s. The popular so-called unit trains, practically became history.
Some rail tracks on Hunts Point over the years have actually been covered by buildings as lack of space became more critical.
Even today, some New York politicians and some in the private sector are pushing to increase rail usage, primarily based on reducing highway traffic and environmental reasons. For example, there is a push to have long haul trucks deliver produce to New Jersey and they “ferry” it over to New York. However, that would add an extra day before the perishable products are delivered. Each added day reduces quality and the value of produce.
Hunts Point has received a federal grant as well as monies from New York City totaling about $22 million to upgrade rail siding and a transfer dock at the market. Still, trucks will continue to be the main source of transportation. Why?
If nothing else, consider this. Despite Hunts Point receiving between 2,500 and 3,000 rail cars yearly, rail cars often take up to 18 days to arrive at the market from the West. Piggybacks regularly arrive in about six or seven days. A single driver owner operator commonly arrives in five days. — Bill Martin
(This is the second of a four-part series based upon my visit to Hunt Point on Dec. 4, 2014)
As the world’s largest fresh produce Terminal, the Hunts Point Terminal Produce Market has about 130,000 trucks a year delivering fresh fruits and vegetables to its wholesale distributors.
With nearly $2.5 billion in annual sales, Hunts Point serves as a distribution hub for 20 million people in the New York City metropolitan area that covers about a 50-mile radius. At any one given time there are about 8,000 people on the market, located in the South Bronx. The wholesalers also distribute fresh fruits and vegetables to Canada and as far south as Florida, plus a number of other markets east of the Mississippi River.
The big rigs begin rumbling onto the market when it opens to truck traffic at 9 p.m. on Sundays and closes at 3 p.m. for its daily clean up. The Hunts Point gate fee for big rigs is $20.
Ironically, Hunt Point opened in 1967 primarily as a rail terminal, but now an estimated 75 percent of the produce delivered is by truck, with the balance by piggyback trailers. The majority of that “pig” freight is potatoes, onions and carrots.
Still, it is shipments by truck that allow Hunts Point to operate as efficiently as it does. Yet the volume of produce arriving at the facility continues to increase, and the 48-year-old complex has outgrown its capabilities to handle all the product it needs. As a result, wholesalers on the market own or lease about 1,000 refrigerated trailers for storage purposes. — Bill Martin
(This is the first of a four-part series based upon my visit to Hunt Point on Dec. 4, 2014)