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Transportation shortage reaches critical stage

Several different people in the produce industry are calling the current transportation shortages as bad as they have ever seen at this time of year, with mixed opinions about how soon relief might come.

“If it doesn’t ease up by February, watch out,” Kenny Lund, vice president of support operations for the Allen Lund Co., based in La Canada Flintridge, CA, said on Monday, Jan. 15. “The next two weeks are going to be critical. If there aren’t a lot more trucks out there in February, then we could have shortages all year. I have never seen it like this in January.”

Trent Bishop, vice president of Lone Star Citrus Growers, based in Mission, TX, echoed the same sentiments, noting that he has never seen such a truck shortage in Texas in the month of January in the two decades that he has been in the citrus business. “We have 20 loads that are uncovered,” he said in early January. “We’re banging the phones trying to find trucks.”

Bishop said the truck rate from the Rio Grande Valley to Los Angeles has doubled in a bit more than a month’s time. Looking at his books, he noted that in late November the rate was $2,700. “Today (Jan. 8), the rate is $5,500,” he said.

Lund said certain lanes — including coming out of Texas — are especially difficult. Across the board, he said rates are up about 20 percent in the last month.

Greg Paulson, president and owner of Giltner Inc., a transportation firm based in Jerome, ID, said he is trying to keep the rates down and not gouge his current customers. “We’re not up 20 percent, but I’d say we’re up 10. We’re using this to try to open doors and not abuse our customers. Hopefully they will remember us when trucks are plentiful.”

Both Paulson and Lund credited a robust economy for being the most important factor in the current truck shortage situation. “The No. 1 reason is the economy,” Lund said. “The economy is booming. There are a lot more loads out there. In 2017, our load volume was up 17 percent.”

He said all sectors of the economy are up creating a greater demand for the movement of freight. That creates a shortage of equipment and higher rates, using the basic economic principles of supply and demand.

Paulson agreed, adding that the strong economy is also producing jobs luring some truck drivers into work situations closer to their home. This increased demand and lack of equipment is especially impactful on the fresh produce industry. Paulson said that hauling fresh produce has its own challenges and truckers avoid it if they have other high-priced hauls available.

While neither Lund nor Paulson believe the new electronic logging device (ELD) regulation is the primary cause of the current shortage, they both said it has played a role. Lund said even if it reduces volume just 5 percent, that could have a big impact. He said the new regulations would cause the produce industry to change its standard operating procedures. The Allen Lund Co. offers a dock-scheduling program so he admits to being prejudice concerning the need to switch to scheduled appointments rather than a first-come, first-loaded protocol. “We just can’t have trucks showing up and having to wait four or five hours to be loaded. That just doesn’t work anymore,” he said.

The new ELD regulation doesn’t change the hours of service regulations but it does make drivers adhere to them electronically. With the demise of paper logbooks, stretching the truth is no longer viable. For example, wait time at a dock while being loaded counts toward drive time. Paulson said his company shifted to electronic logging devices several years ago, so to him the new regulation merely levels the playing field and prevents those who were fudging from breaking the rules.

Bishop said the end result is causing havoc for shippers. “The ELD mandate is causing problems that we have never experienced before,” he said. “We just can’t get trucks. Each of us on the sales desk is holding orders that we haven’t turned in because there are no wheels to put under them.”

Adam Cooper, vice president of marketing for The Wonderful Co., based in Los Angeles, also noted the transportation problems. “Transportation has been a challenging factor to doing business. Recent regulations have resulted in increased transit times and less availability of trucks, making logistics more difficult and more expensive,” he said.

To help alleviate problems, The Wonderful Co. has added distribution centers across the country. “We anticipate our newly added distribution points will be a big advantage moving forward,” said Cooper.

Paulson took a philosophic approach to the situation and said that over time the shortage situation will right itself. “It’s a fragile balance with 3-4 percent more movement creating a big shortage,” he said. “But right now there are record truck sales out there. It’s hard to predict when it will correct itself but it will. I have been a beggar and I have been a chooser. Right now I am a chooser, but I know I’m going to be a beggar again before too long.”