Posts Tagged “LMTS”
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.”