Posted: Thursday, March 29, 2012 10:00 AM
Stricter regulations tighten truck, rail supplies, expert says
By JOHN O'CONNELL
Due largely to new trucking regulations, freight experts predict fresh potato shippers will see a continuation of transportation challenges they faced last fall, when the supply of refrigerated trucks and rail cars was stretched thin.
Travis Blacker, president of the Idaho Grower Shippers Association, said his organization worked closely with Union Pacific Railroad and C.H. Robinson Worldwide Trucks to try to increase shipping capacity during the 2011 harvest and holiday season.
"We had a lot of orders and we just didn't have a lot of trucks or rail cars," Blacker said. "Overall, I think we got the orders covered."
He doesn't anticipate relief in the future, however, due to government's influence.
"They've really tightened up on so many regulations, it's caused a lot of smaller trucking companies to spend thousands and thousands of dollars to comply, or they've just thrown in the towel," Blacker said.
Stricter trucking regulations could shift pressure to the rail industry, Blacker said.
"I think 2013 is going to be even tougher. It's only going to get tighter and tighter," he said.
New California emission standards governing truck refrigeration units will be more strictly enforced beginning January 2013. The regulations require shippers to exercise "due diligence" to make certain the truckers they hire use carbon-emission compliant refrigeration upon entering the Golden State. Luke Gowdy, operations manager with C.H. Robinson, considers the law vague in defining due diligence.
"Expect some challenges with capacity there," Gowdy said.
The federal highway bill that recently passed the House of Representatives includes a provision phasing in electronic onboard recorders over three years. The recorders provide a computer driving record, which Gowdy said could prevent drivers from manipulating their log books in order to spend more time on the road. Gowdy also noted a provision to increase allowable truck freight weights was defeated in the highway bill.
"As far as I know it's going to be at least two to three years before it comes back. It'll be a slam dunk eventually, but not today," Gowdy said of the weight limits.
He also worries about the impact of rising gas prices and truck driver wages that have flattened well below the Consumer Price Index. The good news, he said, is that numbers of drivers and trucking equipment production are both on the rise.
Pat Linden, business manager with Union Pacific, said the railroad hired its subsidiary, Union Pacific Distribution Services, to help improve cycle times of refrigerated rail cars. Since October, Linden said, UP has also repaired 200 damaged refrigerated cars to bolster the fleet. He said UP is considering plans to build at least 1,000 more refrigerated cars and hopes to have the first of those in circulation by late 2013.
Linden said UP shipped 12 percent more potatoes in 2011, which was the railroad's best year for both profits and customer satisfaction.
Linden advised growers that car shortages are bound to happen in times of high pressure, and they can help by quickly moving the cars they receive.