Truck rates climb as summer rush hits - The Packer

Truck rates climb as summer rush hits

06/04/2014 11:55:00 AM
Coral Beach

FileTruckload rates for produce reefers are as much as 10% higher nationwide than they were a year ago and some industry insiders say the higher costs are most likely not related to diesel prices.

“Fuel is not in the picture,” said Mark Montague, senior transportation pricing analyst for DAT Solutions, which operates a load board network (linking drivers with loads) and trucking industry data service in Beaverton, Ore.

DAT Solutions processes more than 99 million transactions annually and bases rate estimates on $24 billion of freight bills, according to its website.

Changes in federal hours-of-service regulations for commercial drivers are one factor contributing to increasing rates, with emissions regulations in California pushing rates in the Golden State even higher, Montague said.

The hours-of-service changes require drivers to stop for rest breaks more often, meaning it takes longer to reach destinations such as distribution centers, many of which were located years ago based on drive times allowed under the old regulations, Montague said.

“Some (truckers) have gone to a relay system where the first one drives so far, then another driver picks up the trailer and takes it on,” Montague said.

“The downside, particularly with temperature-sensitive loads like produce, is that you don’t have the continuity of one driver taking care of the load for the whole trip.”

Another factor is the tightening rates emissions regulations by the California Air Resources Board (CARB), which apply not only to trucks picking up and delivering produce in the state, but those merely driving through California.

click image to zoomCourtesy DAT SolutionsMontague said as of early June, many of the highest rates in the nation were for trucks going into California. The DAT data for the week ending May 31 showed per mile rates of $2.44 in California for reefers.

“At least 90% of the fleets that haul fresh produce have 10 trucks or less,” Montague said, adding that many produce haulers are individual owner-operators with only one truck.

“The changes in regulations really make it hard for the smaller operators because of the costs for upgrades. The overall message is a lot of smaller truckers are having trouble.”

Officials with the Owner-Operator Independent Drivers Association agreed with Montague’s assessment. The trade association represents more than 150,000 members, including many small and one-truck operations.

Spokeswoman Norita Taylor said the association believes a number of factors are contributing to increasing rates this summer. She said the association is finding similar statistics to those provided by DAT Solutions and that the CARB regulations are definitely part of the equation, as are the hours-of-service changes.

Whatever the cause, one aspect of the commercial trucking scene that continues to cause problems for shippers is availability, which is even worse for reefers than regular trailers.

For the week ending May 31, there were 8.2 refrigerated loads for every one reefer available. Availability of flatbeds is even worse, according to DAT Solutions data, which showed 39.9 loads for every single flatbed available during the week ending May 31.



Comments (2) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

R Henry    
CA  |  June, 04, 2014 at 03:47 PM

CARB mandates very expensive upgrades in the name of the environment, yet NEVER issues reports on the effectiveness, or cost effectiveness, of their requirements. CARB is an overly powerful agency run amok.

Doug    
Raleigh NC  |  June, 11, 2014 at 05:03 PM

Not only what R Henry said, but the CARB regulations are an unfunded mandate that puts all the responsibility for enforcement on supply chain partners.

Feedback Form
Leads to Insight