have always relied on having access to an adequate supply of trucks
available to carry their crops to market. Recent developments have upset
the balance of available trucks to loads needing a ride
and subsequently created a serious transportation capacity
According to data collected by logistics company C.H. Robinson Worldwide, Inc., the
transportation industry is affected by three main challenges. At the top
of the list is the cost of fuel. As of June 1, East Coast diesel costs
are up 95 cents a gallon over 2010. Although those costs vary from week
to week, no one sees the return of 2010 prices.
This increase in fuel costs translates into increased operating costs
of about 17 cents per mile for trucking companies. That means fuel for a
load traveling from Plant City to the Bronx in New York (1,162 miles)
would cost $200 more than it did last year.
Another issue affecting transportation is truck supply. During the
economic downturn, more than 6,000 trucking companies went bankrupt,
which reduced total truck capacity by about 13 percent, according to
investment research firm Avondale Partners. That shortage is expected by
industry experts to get much worse.
Fleets of all sizes have declined in the past few years, according to
the American Trucking Association. Small truckload fleets with less than
$30 million in annual revenue have declined in overall size by 16.2
percent since their peak in mid-2005. Large truckload fleets with
greater than $30 million in annual revenue have declined by 13.1 percent
since their peak in mid-2007.
In addition to fewer existing trucks on the road, production of new
trucks is lagging demand. The majority of new trucks being purchased are
for replacement of old ones, not as additions to a fleet.
The third issue that will affect the transportation picture is new
government regulation. Three proposed regulations could make a
difference in how many trucks are available. The Federal Motor Carrier
Safety Administration’s Compliance, Safety and Accountability
(CSA) program would replace the current method of rating the safety of
motor carriers. The program will assign all carriers a rating based on a
scoring system the FMCSA calls BASIC, which stands for Behavior Analysis
and Safety Improvement.
second proposal involves changing the number of hours a carrier may
drive in one day. It has the potential to shorten the overall on-duty
hours from 14 to 13 per day. It also may limit driving time to 10 hours
and extend the mandatory restart period to include two midnight-to-6
The third proposal is mandatory use of electronic onboard recorders.
This would replace the current manual log book process and provide
greater controls on actual hours that a driver is in service.
Experts say those regulations will take even more trucking capacity
out of the market. John Larkin of Stifel Nicolaus &
Co. calls the probable scenario
“the mother of all capacity shortages.”
But assistance is available. FFVA works in partnership with C.H.
Robinson to assist members with transportation and other
marketing-related issues. "Other than the cost of the product,
transportation is the highest cost component in the sale transaction,"
said Mike Aerts, FFVA diretor of membership and marketing. "By
managing transportation expenses, quality and availability, delivered
sales via C.H. Robinson allow shippers to elevate this service from the
process of moving product from origin to destination to use as a
significant marketing tool." For additional information, contact the
FFVA Membership & Marketing Division at (321) 214-5200 or
Through the C.H. Robinson Transportation Program designed for
FFVA members, participants have access to:
Rate information – shippers are emailed weekly truckload rates
for all major U.S. and Canadian destination markets and Wal-Mart
Rate arrangements such as yearly or seasonal contract pricing;
Unique “Less-Than-Truck-Load” programs built around customer
expectations, regardless of order size;
Weekly transportation market reports, to provide shippers with an
overview of transportation conditions throughout the U.S. and
C.H. Robinson website access, to allow participants to 1) communicate
directly with their account manager, 2) enter load information, 3)
receive rate quotes, 4) view and download signed bills of lading, 6)
view weight tickets and unloading receipts, 7) access payables
information, and 8) create customized transportation performance
Multi-modal freight solutions, as options are provided based on pricing
and service level requirements;
Surge capacity protection, because having a solid carrier network allows
for guaranteed supply during holidays and peak shipping periods;
Dispatching particulars and 24-hour traceability for every order
throughout the in-transit process;
Claims management, since C.H. Robinson assumes liability for logistics
-related loss and damages on all shipments transported with C.H.