Posts Tagged “Keeping It Fresh”
By Michael Tanaka, ALC Phoenix
There has been a long foretold narrative that a driver shortage, along with other concerning factors, are leading toward a long term deficit in the truck-to-load market balance. Today it may seem that there is no longer a looming crisis. Due to supply chain disruptions caused by the pandemic, conflict in Ukraine, fuel rates, inflation, and fluctuations in consumer spending habits, volumes have seen significant decreases overall. For customers and brokers alike, this has led to temporary alleviation, but when the market inevitably stabilizes, we may see that these trends are still problematic. The core issues remain with the driver market: average age, more available/flexible/safer employment options, unpredictable market, legal risks, etc. Experts are predicting that the driver shortage will grow to 160,000 drivers by 2030. There has also been a decline in the ability to keep up with semi-truck production and an increase in carriers leaving the market. While there was a slight ease in 2022, due to raises in driver pay that are not sustainable in this market, we still face an uphill battle and a vacancy of 78,000+ drivers.
One significant way the industry is trying to help close the gap is by adopting and implementing self-driving trucks. While there have been autonomous trucks tested and implemented on the road to some success, we have a long way to go before significant adoption. The majority of self-driving trucks making deliveries are running short, simple, light runs with smaller trailers. Currently, only 24 states allow autonomous semi-trucks (most states do allow testing if a backup driver is present). Interstate usage has yet to be approved by the federal government.
Due to the remaining legal, technological, and financial (cost of production not yet scalable) issues combined with the costs and challenges of replacing and upgrading the fleet, it is hard to see a significant percentage of adoption within the next few years. In 2021, 91.5% trucking companies were made up of six trucks or less. Expecting the hundreds of thousands of small carriers and owner-operators to replace and upgrade their fleets is a big ask. In 2021, there were 4.6 million semi-trucks in the U.S. The nature of the industry, legally and culturally, means major changes are typically implemented and standardized slowly. Lobbyists and unions often curtail progress further. Additionally, there are currently issues in the production of semi-trucks. Even in this extended soft market, a multi-year parts and worker shortage has limited the ability to keep up with orders.
It may be safe to assume that supply chain and consumer patterns will begin to stabilize before the adoption of autonomous trucks are significant. Carriers have had to work with lower rates and higher costs for years, causing an increase in bankruptcies and closures. As volumes increase and the supply and demand paradigm flips, expect to see the remaining carrier market use all of their leverage to offset their losses. While the development of self-driving trucks is progressing, it’s not going to save the day in the near term. Therefore, we must rely on our own preparation to weather the coming storm.
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Michael Tanaka graduated from Arizona State University in 2014 with a BA in Business Communications. Upon graduation, he began working in the transportation industry. He started off as a Business Analyst in the private emergency services sector but eventually pivoted to the OTR freight industry. He has spent time on both the asset and brokerage sides of the industry gathering experience through his roles in Operations, Carrier Sales, and Account Management. He began working for the Allen Lund Company in September of 2021 as a Transportation Broker and is now an Account Development Manager.
By Sarah Stone, ALC Atlanta
Q&A Interview with Kyle Reinhard, Transportation Manager. The Peach Truck
While preparing for the upcoming season, I reached out to Kyle Reinhard, Transportation Manager at The Peach Truck, for his perspective on the market and their unique business model.
They operate over 60 booths across Nashville, TN, and run a 25-state tour of pop-up markets, plus a mail order delivery service to get you the tastiest peaches you’ll ever have drip down your chin. The peaches are picked in the morning, processed and packed in the early afternoon, and on a truck by early evening. For the past five years, we’ve managed the truckloads from the farm to a designated cross dock location. The pallets are immediately transferred to a branded ‘show truck’ and sent to the pop-up sales locations. We asked Kyle to dig into The Peach Truck’s promise of delivering fresh-picked peaches direct to the consumer.
What are the biggest challenges to this system?
The unknown – from forecasting sales projections to the natural unpredictability that is fresh produce harvest. Building out what our season will look like with so many unknown variables presents a wide range of potential scenarios, and that can certainly be challenging. Our biggest hurdle will potentially be something that is totally out of our control – supply.
When looking for a logistics partner, what are your top three requirements?
1. Price – Cheap doesn’t necessarily equate to good. And, on the contrary, neither does expensive. Ideally, finding that happy medium is where you want to be when identifying quality transportation partners.
2. Performance – How a carrier provider consistently performs is a good indicator of the overall health of their operation. How they react to and resolve these inevitable incidents, then work to prepare themselves to avoid any such incidents moving forward, really shows me how dedicated they are to their performance.
3. Communication – Consistent and reliable communication is key. When it’s really running well, it can be a beautiful thing to witness and partake in – all parties working towards a common, mutually beneficial goal.
ALC’s team is proud to be a dedicated extension of The Peach Truck. The Peach Truck prides itself on delivering high-quality peaches to the customer, and ALC strives to provide the same, quality service to their customers. The key to our success is our partnership with the customer- including carriers as a customer. While we cannot control Mother Nature and how the crops yield, we can ensure that the peaches are delivered fresh and on time. Communication, flexibility, and assessing customers needs keeps it “fresh”, and keeps the relationship growing.
Be sure to order some fresh peaches this summer… www.thepeachtruck.com
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Sarah Stone graduated from Appalachian State University with a Bachelor of Science in Business Administration (Marketing). She started working at the Allen Lund Company in December 2010 after several years in the international air and ocean freight industry.
sarah.stone@allenlund.com
By Kenny Lund, Executive Vice President, ALC Logistics
Back in 1976, when Allen Lund went out on his own and established the Allen Lund Company, there was tight control on “regulated freight,” and brokers like him could only manage loads of vegetables and fruit, along with raw goods like bailed cotton. His very first load was a load of cotton.
Most other goods were tightly regulated. Regulations on carriers, rates, and government-approved truck brokers were numerous. Every non-exempt load had to have an approved filed tariff. Transportation was expensive and inefficient.
It all changed when deregulation was brought in under the Carter Administration and continued under the Reagan Administration. Within a few years, thousands of carriers, brokers, shippers, and receivers started operating in a new, freer transportation system. The government got out of the daily pricing of loads and let freedom through capitalism determine the rates. If this injection of freedom had not happened, we would still be hindered by over-regulation and government red tape. Fewer products would be available and they would be more expensive.
Capitalism is not perfect, but there has never been a better system to bring people out of poverty, create more businesses, and supply more products at lower prices throughout the country. Currently, there are more than 400,000 trucking companies, 10,000 transportation brokers, and our stores are chock-full of products from across the country and around the world.
It is easy to compare to the supply chains of communist and socialist countries. Every economic measure bears this out. Democracy and capitalism win every time.
In the early 90s, after the fall of the Berlin Wall, and the collapse of the U.S.S.R., Allen Lund was asked by the U.S. Department of Agriculture to go with a team to Moscow to help improve the produce supply chain that helped feed 11 million Russians in and around that city. For three months, he observed and tried to improve a system that allowed more than 50% of the fruit and vegetables coming into the area to disappear or be destroyed in transit. Drivers who did not care sold their refrigeration fuel on the black market and delivered rotten vegetables. The government paid them anyway. Allen Lund saw how badly a fully controlled economy operated with incredible lack of efficiency. He saw hope in the younger generation as they worked to build up the black market that began to operate with some capitalist principles.
Fast forward to today, it is painful to observe that socialism and even communism are on the rise with those under 30 in the USA. It is inexplicable…and yet there it is. Too many of our universities teach that businesses are all corrupt and that the government and centralized control are the answer. As a business involved in the great American supply chain, the Allen Lund Company has a front-row seat to see how well our nation’s distribution systems work. We must then take it upon ourselves to educate and, in many cases, re-educate the population. We must pass down to the next generations the information about how good we have it with a system based on freedom. We also MUST run our business with professionalism and integrity. Scams, collusion, and cronyism are a stain on the freedoms we enjoy and only paint targets on our free society. Capitalism is the system that allows all participants to achieve the high standard of living available to those who work hard. Freedom is the answer – not government over-regulation.
I’m ready to have a fresh conversation with you!
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Kenny Lund graduated from Loyola Marymount University with a degree in Business Administration. He managed the Los Angeles, refrigerated transportation division of the Allen Lund Company for eight years, before shifting full-time into managing the Information and Technology Department in 1997; becoming the Vice President of the department in 2002. Lund was promoted to Vice President – Support Operations in 2005. In 2014, Kenny, in the position of VP of ALC Logistics, began working with that division of ALC to sell their AlchemyTMS software solutions. In 2019, Lund was promoted to Executive Vice President of ALC and ALC Logistics.
By Makenna Christensen, Software Sales Coordinator, TMS
I graduated this past May from Marquette University and, shortly after, started working at the Allen Lund Company. I have had the opportunity to jump feet-first into one of the country’s most vital industries under immense pressure since the pandemic. To say I’m a newbie would be an understatement, but the best part about being a newbie is that I offer a fresh perspective on the industry. So, here are a few takeaways from my first five months.
The transportation industry is the most critical sector of the American economy, yet it is underappreciated. Without it, people across the nation would be unable to access even the most basic necessities. We often forget that every trucker, broker, and dispatcher is just as essential as our firefighters, nurses, and doctors. Luckily, perceptions are changing; recent polling found that 87% of voters have a favorable perception of the trucking industry, a 20% increase from 2019. Personally, I think these everyday heroes deserve a huge round of applause.
In addition to recognizing these essential workers, we also need to note that we are in an age where digital technology has become the norm. How is such a vital function still stuck in the dark ages? It is estimated that today, approximately 40% of all containerized transactions are still reliant on the physical transfer of paper BOLs. The economic benefits of digital BOLs are immense, with some estimating that widespread adoption of electronic BOLs could save upwards of 6.5 billion dollars for all stakeholders involved. Paper BOLs may be the most blaring example of a technological gap, but there are still businesses across the country that process all their shipments on pen and paper. By digitizing processes with cutting-edge technology, like AlchemyTMS, these companies can improve efficiency and, ultimately, their bottom line.
The most important insight I have gained is that I need to learn more. My first few months merely scratched the surface of the industry’s processes, needs, and limitations. My training has been a team effort that has exposed me to opportunities to expand my knowledge every day, and I look forward to learning more with you.
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Makenna Christensen graduated from Marquette University in 2022 with a Bachelor of Science in Marketing and Human Resources. She started working at the Allen Lund Company in July 2022, as a Software Sales Coordinator for ALC Logistics, the software division of ALC.
By Kenneth Cavallaro, Jr., ALC Boston
Trucking recession? According to a recent Bank of America survey, demand for trucks is actually down 58%. Consumers are spending less money on material items such as televisions and clothing and instead funneling more of their hard-earned funds towards services, reports the U.S. Bureau of Economic Analysis. Kantar’s Entertainment On Demand streaming analytics reveal streaming subscriptions are up 88% since the beginning of 2022. More people are using companies like DoorDash and Grubhub for food delivery. Meanwhile, electricity prices are expected to climb on an average of 20% across the United States this winter and natural gas costs are predicted to increase 36% according to the U.S. Energy Information Administration, presumably further leading to less discretionary spending on material items. What does this mean for the trucking industry?
Our industry is all about supply and demand. The latest data from S&P Global Market Intelligence shows freight rates have continued to fall as global trade volumes slow due to shrinking demand for goods. Freight rate forecasters utilizing the Cass Index have indicated that “freight rates are leveling off and set to slow sharply in the months to come.” So yes folks, we are truly in a trucking recession. Thankfully, with 70% of all goods in the United States moved by the trucking industry, this will eventually resolve. The last recession hit in 2007 and lasted almost two years.
So where do we go from here? Federal investment in our country’s roads, highways, and bridges over the next four years will make it easier for trucks to make on-time deliveries. Drivers will likely see their lives improved by programs like our innovative ALC tracking app, which creates an easier flow of information and allows better estimating on loading and unloading times once they reach shippers or receivers. In addition, our app supports better tracking and provides us with an easily accessible timeline of how the customer’s load is progressing.
Transportation of produce and other refrigerated items leads to even higher rates, partially because of increased fuel usage during wait times for loading and offloading, as the load must be kept at a precise and constant temperature. In addition, wait times are frequently increased when produce coming fresh from the field needs time to cool or produce coming off the truck must undergo quality inspections. Situations such as these increase the amount of fuel the truck requires to keep the reefer running, causing the rates for produce transportation to soar higher than rates to transport non-perishable goods.
With many trucking companies struggling due to the harsh conditions of the current market, company mergers are coming more into play. More trucking companies will likely move in this direction in 2023 if the market does not improve. This would allow more companies to stay afloat, instead of lessening the amount of trucks on the road. Continued urbanization will also allow truckers to traverse parts of the country that were previously off-limits, allowing deliveries to reach more people in less time. There will always be peaks and valleys as we ride this trucking rollercoaster, so buckle up, pull down the lap bar, and hang on for dear life because it is going to be a bumpy ride.
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Kenneth Cavallaro, Jr. is a Senior Transportation Broker in the Boston office. He began his career at the Allen Lund Company in February of 2019. Kenneth has been in the transportation industry since May of 1999. He holds a Bachelor of Arts in Communications from Salem State University.
By Shelby Perez, ALC San Francisco
Guam is a small island territory, 3,950 miles away from the nearest American state, 5,806 miles away from my office in San Francisco, and the place I call home. I was born and raised on Guam knowing that food was expensive and that if there were supposed to be six variations of one product, we’d only have two of them on the shelves, always marked up 31% or more. I never understood why romaine lettuce was $10 for a bag of three heads or why “real milk” from California was $9 a gallon. I knew fuel for the giant ships that brought them into the port was probably expensive, but I never considered what it took to get that food onto the ships in the first place.
I am brand new to this industry. I’ve been at ALC for only about five months now and I’ve jumped in headfirst working on one of the company’s largest accounts. This has completely shifted my perspective on what it takes, not only to get goods across the country, but whatit must take to get goods 5,000+ miles across the ocean.
Since my first in-person interview, I have been told many times that farmers and truck drivers are the backbone of America. The more time I spend learning about the industry and working with the many people that help move goods across the country, the more I’m discovering just how true that statement is and how many other people it takes to support them, including us here at ALC. During the height of COVID-19, while everyone was panic buying toilet paper and all the flour and sugar off the shelves to support our newfound baking hobbies; farmers, production line workers, truck drivers, and grocery store employees were working hard to keep the shelves stocked at the cost of their health and safety. I’ve heard so many stories about how my co-workers were working hard to find trucks
Whether it was buying pizza for their carriers, or sending candy and thank you cards, anything to show their appreciation for great service during a time when you would expect most people to be looking out for themselves and their families. ALC and their carriers and customers not only survived,
| but they also thrived, enough that they could hire me this year! I’m proud that I am now a part of this team. I’m proud to know that the people I work with were a part of the network that helped keep America in business, and helped me perfect my banana bread recipe last year too. I’m proud to know that ALC, our carriers, and our customers were able to pivot and adapt to the circumstances of our world. They’ve proven more than ever that they are smart and hardworking people who are ready to take on tomorrow’s challenges and I am fortunate enough that I get to learn from their experiences and carry them with me towards the future as well. Guam is a faraway land for a mainlander and it’s beginning to make sense why that one bag of romaine and one gallon of milk might set me back $20. But who knows, with the experience I continue to gain at ALC, maybe I could be the one to figure out how to get the romaine and milk for $9 on Guam- or maybe all 15 flavors of Cheerios! | . |
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Shelby Perez graduated from Saint Mary’s College in 2020 with a degree in Business and East Asian Studies. She started at ALC San Francisco in May 2022 as a Broker’s Assistant with the national retail store team.
By Yanni Mathelier, Transportation Broker, ALC Orlando
On Wednesday, September 28, 2022, Hurricane Ian made landfall in Florida as a powerful Category 4 storm. Maximum sustained winds were around 150 mph as it hit the Southwest coast. Bringing in close to 20 inches of rain to the state with tons of flooding which ruined many homes, infrastructure, and farm fields. The Orlando office deals with many produce customers shipping out of Florida. The impact of Hurricane Ian has caused many customers to either lose crops and deal with flooded fields or have to replant for the next season. Missing a season in the farming industry can be devastating, detrimental to the farmer, and takes a hit on the transportation industry, therefore affecting consumers.
Ian mainly hit farms across Southwest Florida, and the trickle-down may be felt in grocery stores across the nation, as Florida is a critical spot for farming in the winter when other places are too cold for operations. Florida is one of the world’s largest producers of citrus. The issue most farmers are having down south when it comes to these fruits, is that the trees were badly damaged during the hurricane. This creates a time frame issue that can affect Florida’s economy as the industry already faces increased labor costs and competition from foreign imports. These crops will take a minimum of two seasons for the groves to recover to pre-hurricane production levels.
The question that follows: Is Florida’s citrus industry on a ticking clock? We will soon start to see a rise in citrus prices and lower production numbers. This is something in transportation we must follow as it could negatively affect the capacity in Florida, and as discussed before, the trickle-down to the customer would be inevitable.
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Yanni Mathelier is a Transportation Broker and began his career at the Allen Lund Company in March of 2022. Yanni has been in the transportation industry since January of 2021. He graduated from the University of Central Florida with a Bachelor’s in Business Administration.
By Dave Comber, ALC Madison
Most of us have enjoyed cranberries one way or another. Whether drinking one of the varieties of cranberry juice, as a salad topping, as an ingredient in a dessert, or as the cranberry sauce staple in the holiday season meal in the U.S. We have all at least tried cranberries in one form or another. Have you ever thought about all it takes to get cranberries from the farm to our households? The season to harvest cranberries is upon us now in full swing to get them to us for the holiday and the remainder of the year in all varieties, we enjoy them on a regular basis.
Cranberries are one of the few types of berries native to the U.S, with Wisconsin and Massachusetts producing more than 90% of the cranberries grown in the country. As most in the transportation industry are aware, shipping produce is no easy feat, and
transporting cranberries is no exception. Cranberries need to be handled with care.
The cranberry harvest begins in mid-September for most cranberry-producing states and runs through mid-November. Harvesting dry and wet cranberries are accomplished in two ways. Dry harvesting is a popular way for many small farmers as it doesn’t require as much coordination and machinery as wet harvesting. A device similar to a lawn mower pulls the berries off of the vines and into burlap sacks. While this is an easier method, a greater percentage of cranberries do get damaged. Wet harvesting is a method used by
large farms that work with major juice companies like Ocean Spray. Bogs are closed off and flooded with about 18 inches of water. Water reels are sent off on the water to stir up the plants and knock the berries off the vine. Cranberries have little pockets of air in them, so they float to the surface of the water. Nets and floating barricades are then used to move the berries to where they can be collected.
Before cranberries can be shipped they need to be carefully packaged for their journey. Cranberries have tougher skin than most other berries, but they still need to be handled with care. There are a couple of methods used to package them. They can be packaged in plastic bags with holes to vent out excess moisture, or in clamshell packaging. They then need to be placed in sturdier boxes that can support the weight of them being palletized. If shipping cranberries in bulk, they are put in plastic or fiberboard bulk bins to be placed in the truck.
Cranberries do not typically require any temperature regulation if they are being transported short distances. Frequently cranberries are transported only short distances from the farm to where they are being processed. However, if transporting cranberries in very cold or hot temperatures, or if shipping directly to stores at greater distances from the farm, then cranberries need to be transported in a refrigerated (reefer) trailer. Cranberries transported in a reefer should be kept at a temperature of 36 to 39 degrees Fahrenheit. Cranberries generally can be stored for up to three to four months if kept at this temperature. Outside of these temperatures, cranberries can become damaged. If cranberries are kept too warm they will deteriorate and begin to rot within a few hours. If cranberries get too cold, they will turn brown and the inside will become tough and rubbery. It’s important that the temperature remains at the proper temperature to avoid any damage upon delivery.
As we get closer to the holiday season in the U.S., we think about all the good food we are going to enjoy with family and friends. More than likely, we will have cranberries in one form or another at the holiday meals. Enjoy and remember all it took to get cranberries from the farm to your dinner table.
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Dave Comber is the manager of ALC Madison and has been with the Allen Lund Company for eight years. He worked for three years as the assistant manager, before being promoted to his current role. Comber brought with him over 20 years of management and customer service experience within the transportation industry from Northern Freight Service, Inc. and Schneider National, Inc. Comber attended Lawrence Univercity in Appleton, WI and earned a B.A. in Liberal Arts with a Major in History.
By Hunter McDade, ALC Dallas
Shippers and manufacturers are relocating in incredible numbers to Mexico as of late. Economic growth in Mexico has caught the attention of many U.S. manufacturers and shippers. Mexico has steadily improved transportation networks, has a young educated workforce, global commerce, and reduced costs.
The most glaring advantage is the cost and quality of the workforce. The average base salary for entry-level manufacturing workers in Mexico is approximately $3.50 per hour. Well below the federal U.S minimum wage of $7.25 per hour. Just because the pay is lower, however, does not mean that the quality of work is less. Mexico graduates on average 130,000 engineers and technicians annually. Lower labor rates also mean lower operating expenses, including costs for industrial space.
Proximity is another main benefit of manufacturing in Mexico. Shipping and supply chain management costs are much lower than in other international commerce such as Asia, Europe, and India. Mexico shares 52 access points which an estimated over 70 million automobiles transit yearly. We also have to consider the United States-Mexico-Canada Agreement (USMCA). The agreement between the three countries encourages free and fair trade and drivers of economic growth in North America. This agreement offers few obstacles for international business and reduces the cost of moving goods internationally.
Improvements in transportation networks, available workforce, and reduced costs have contributed to more produce being transported from Mexico to Texas. Each year the number of produce shipments from Mexico increases. 2007 was the first year Mexico shipped more than 100,000 truckloadsof fresh produce through Texas. The latest reported number was for 2020 when approximately 289,354 truckloads of produce crossed the border. It will be interesting to see updated numbers.
The trade agreement and the completion of the Durango-Mazatlan Highway in 2013, connecting the west coast and east coast of Mexico with a contiguous freeway, have been huge factors in these numbers rising. Fresh produce needs to be transported with care and efficiency, building highways such as the Durango-Mazatlan cuts down travel time, which means fresh produce being delivered promptly and freight savings in the transportation industry.
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Hunter McDade, transportation broker, graduated from Ouachita Baptist University in 2019. Upon graduation, McDade began his career working in the transportation industry. He has been with ALC for over one year.
By Derek Robinson, ALC Savannah
As August is moving along, kids are back to school, summer is passing by, and fall is quickly approaching, the time is near. Pumpkin season. Here in Georgia, that harvest calendar runs from September 15th through November 15th , only a short five weeks!
Pumpkins are a part of the gourd family, which includes watermelon, cantaloupe, cucumber, zucchini, and honeydew. Northern Georgia has the lion’s share of acreage, over 600, of the pumpkin crop, though southern farmers are picking up the pace to join their neighbors to the north. Illinois does hold the
record as the pumpkin king, in 2020 they increased the area used to grow pumpkins to 15,900 acres, producing over twice as many as their next closest competitor!
In the next few weeks, drivers will begin positioning down to the southeast, pack their bags, finish pre-trips and start their engines. It has been a hot summer in the South, and many of us are hoping for a cooler fall and smoother roads to travel. Depending on the size of the crop, the harvest will move up
from Georgia and head north and the drivers and workers will follow.
Allen Lund Company has been hauling pumpkins out of Georgia for decades now, working with many of the same drivers’ year in and out. We have built some close relationships, knowing about their trucks,
where they came from, their family, and what their plans are for Halloween. Family is important to us here at Allen Lund. This fall take a day, carve a pumpkin, spend some time laughing and smiling with your loved ones and make sure to thank the farmers who grew it and the drivers who moved it for you!
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Derek Robinson is a business development specialist in the Savannah office and has been with the Allen Lund Company since 2015. Robinson attended Savannah Technical College, specializing in Aviation Structural Mechanics.