Produce Trucking Issues

III. Produce Trucking Issues

This section is intended to identify the more important concerns that currently exist or are likely to develop for the fresh produce trucking industry. While this list is not expected to be exhaustive, these are the concerns most often mentioned by industry leaders, trade publications, web-sites information, and trade group representatives.

Driver Availability

There are more than four million medium and large trucks in the U.S., and the demand for transport services is growing.5 It takes a substantial, dependable driver pool to keep this fleet in operation. Obviously, all of these trucks are not refrigerated, produce-hauling vehicles, but the problems associated with driver availability are universal throughout the trucking industry.

According to the California Trucking Association (CTA), there is clearly a problem in finding long-haul truck drivers.6 There were an estimated 3.02 million commercial truck drivers in the U.S. in 1995 (U.S. Department of Labor-Bureau of Labor Statistics). One industry observer ("Sign Post," Hudson, WI) indicated there was probably a three to five percent driver shortage from the total driver pool.7 A Wall Street Journal article (February 26, 1997) indicated the American trucking industry could probably use as many as 300,000 new drivers annually.

One industry source indicated that about 50,000 drivers leave the profession every year. Truck driving schools are said to graduate about 36,000 drivers annually;6 thus, graduating numbers are not adequate to meet demand requirements.

What seems to be the cause of this driver shortage?

(1) Driver Turnover – Truck drivers have a fairly high turnover rate with respect to the firms for which they work. A study done by Martin Labbe Associates for the Interstate Truckload Carriers Conference, and reported in August, 1996, found that of the 1,227 drivers surveyed, the average driver had worked for his present employer for 3.7 years. More than one-half of the drivers aged 30 and under had worked for their present employer for less than one year.8

(2) Compensation – The California Trucking Association estimated that a beginning driver makes about $28,500 annually, moving up to about $45,000 annually after ten years of service. The 1996 annual average wage was $32,874 for California-based drivers.6

(3) Professional Status – There is concern among truck drivers that they are not respected by the shippers or by the receivers. As one truck driver said, "They treat us like dirt." Many shipper and receiver firms are not perceived as being driver-friendly. Some of these firms were reported to deny drivers the use of washrooms, company cafeterias, or on-premise pay phones.

(4) Extended Periods Away From Home – Long distance hauling requires drivers to be away from home for extended periods. In the ITCC study, it was found that 36 percent of the drivers get home less than once per month.8 Another 31 percent of the ITCC surveyed drivers got home only three times per month.

(5) Driver Concerns – Industry studies and trade group discussions by various organizations indicate that driver frustrations include the following: excessive waiting time to load and unload; deciding lumpers fees and who pays them; inability to load and unload the vehicle easily; bad attitudes of the carrier’s dispatcher; bad attitudes of the receiver’s personnel; and lack of good directions for locating shipping and receiving firms.

Truck Availablity

Many shipping industries are increasingly concerned that truck availability will be a problem.9 Truck demand appears to be positively related to general economic activity. As production of goods increases for a growing economy, so too does demand for trucking increase.

In the 1997 study by ATAF (Gallup), it was estimated that truck demand would increase by 1.1 percent annually through the year 2005.9 Increasing demand is also related to more firms having adopted Just-In-Time (JIT) inventory management, which requires tight delivery schedules and more goods in transit than in a warehouse.13 Also, consistent bottlenecks have been observed in rail transport, placing additional pressure on the trucking industry.

For the produce industry, the truck shortage seems to be most acute during the peak summer harvest months. In the longer perspective, some observers believe that the produce trucking industry will face continued truck shortages.

Profit margins for many truckers has been minimal for several years. As a result, there is little incentive for trucking firms to replace or add to their fleets.

Rate Levels

Of primary concern is the cost to ship goods from one place to another. Most industry observers agree that produce trucking is a very competitive industry. As a result, trucking charges have remained fairly stable for a number of years; however, during the peak summer months, June through September, trucking rates usually increase substantially. Thus, in agricultural trucking the rates are highly variable with the season. Mr. Bill Martin, in "Produce News," reported trucking rates reached $5,000 per load from California to the East coast in May, 1997, up sharply from the usual $2,700 to $2,900 per load rate.2

Rate levels by year, by month, and by "peak weeks" will be addressed in a subsequent section of this report. For this section, suffice it to say that average annual produce trucking costs have been fairly stable for about a decade, but vary greatly during the summer harvest season.

Highway Weight Limits

Truck weight limits and dimensional characteristics are generally specified by the U.S. Department of Transportation; however, some states and local regulations on certain roads vary from the federal regulations.

A typical California "big rig" has an 80,000 pound gross weight limitation with a 44,000 pound tare weight limit for a tandem axle. The problem encountered is that the buyer pays on a per load basis; therefore, the buyer would like to maximize the load weight. Filling the truck sometimes exceeds state or federal weight limits, and thus, weight restrictions tend to encourage buyers to seek products from sources not influenced by weight limitations.

Hours of Service Regulations

Hours of service regulations are the rules specifying the time limits a driver may drive and the time that must be allocated to non-driving. Most of the present laws covering a trucker’s driving and non-driving time were legislated in 1938, but truck equipment, roads and technology have changed in the 60-year post-legislation period.

Current service regulations state that a driver must maintain a daily log book. According to federal regulations a driver cannot drive more than 70 hours in an eight day period.5 This law also specifies that a driver must have an eight hour break after having driven 10 hours. Loading and unloading time is counted as driving time.

Some industry leaders contend the 18-hour period (10 hours driving, eight hours resting) is not consistent with the human rest cycle (American Trucking Association). It has also been of concern that for multi-destination loads, the first receivers give little priority to getting their portion of the cargo unloaded. This makes it impossible for the driver to reach subsequent stops by the designated time of delivery while complying with the hours of service regulation.

{ CATI , also CAB , CFSNR , CIT , VERC }