California Produce Volumes Blooming as Weather Dries Out

A significant heat wave will develop in the western U.S. this week, mostly in California, with temperatures cracking the 100° mark in some places. California has the largest economy of all 50 states and is the number one producer of summer crops like strawberries. The fruit is the state’s fourth-largest commodity, and California produces nearly 90 percent of total U.S. production. For growers, there appears to be some light at the end of the tunnel after an excessively wet winter that delayed plantings, as well as severe spring storms that destroyed approximately three million cases of cherries, as reported by FreightWaves last month. 

Impact on Freight

According to FreightWaves Market Expert Dean Croke, produce volumes have been growing recently with the arrival of more summer-like weather, especially in the major northern California agricultural regions. The latest SONAR data shows outbound tender volumes in Stockton (OTVI.SCK) and San Francisco (OTVI.SFO) have increased 11.29 percent and 39.50 percent, respectively, in the last two weeks. Also, outbound tender rejections of refrigerated freight have increased fourfold to 6.70 percent and 5.16 percent, respectively. Loads that are offered to carriers by shippers may be rejected by those carriers for any number of reasons, including price per mile as well as capacity (amount of trucks available).

SONAR Ticker: AGRATE:SFOJFK (purple), RTRI.SCK (green), RTRI.SFO (orange)

Agricultural truckload rates (AGRATE.SFOJFK) from the San Francisco area to New York City have increased by 5.45 percent to $7,700 over the same two-week period, which is an ominous sign for shippers exporting to large East Coast markets. Following Memorial Day in 2018, truckload rates jumped 21.02 percent to reach $9,914 towards the end of June. With produce volumes on the rise from the West Coast, shippers need to be ready for decreasing capacity. Long-haul (850 miles or more) outbound tender rejections from San Francisco (LTRI.SFO) almost tripled to 2.82 percent in the last week. There’s capacity in the market this week, but this could change quickly. Shippers should extend lead times to keep carriers on their weekly coast-to-coast cadence and decrease wait times (which increased by around 10 percent in May).

The avocado crop not doing quite as well as others in California. The city of Fallbrook in San Diego County claims the title of “Avocado Capital of the World” and holds an Avocado Festival each year. An intense heat wave in July 2018 took a steep toll on the popular summer fruit. 

“My objective, pretty consistently every year, is to be finished by the Fourth of July,” Fallbrook grower and grove manager Charley Wolk told Fresh Plaza.com last week. “Except for one grove, I’m finished now. That gives you some idea of how much smaller that crop is.”

Jan DeLyser, vice president of marketing for the California Avocado Commission, puts early estimates of the 2019 harvest at 175 million pounds. That’s down considerably from 337.8 million pounds harvested in the 2017-18 crop year.

“We started in basically early April with volume shipments, and we’re looking at continuing really into September, which is a longer period of time than we thought we were going to be in the marketplace originally,” DeLyser said.

The weather in the past year has reduced volume, but has helped in other ways. The avocadoes, in many cases, are larger than normal and growers have saved some money because they didn’t have to irrigate as often compared to a normal season.

Heat Wave

Record/near-record temperatures are forecast for the next few days for the Sacramento and San Joaquin valleys. Temperatures on the I-5 corridor in places such as Chico, Redding, Sacramento and Stockton will reach 100°-106°. On average, these cities see their first 100° day around this time of year, but normal highs are 86°-88°. Highs of 95°-105° are likely in the San Francisco metro area, as well as Bakersfield, Fresno, Hanford, Merced and Paso Robles.

The heat wave will spread to far northern California and southern Oregon on Tuesday, as well as far southern California, southwestern Arizona and the Las Vegas area. Temperatures will range from 95°-105° from Mount Shasta, California to Medford, Oregon, and from 110°-115° from Eagle Mountain and El Centro, California to Phoenix and Yuma, Arizona. The hottest spot will probably be Death Valley, with scorching highs of 115°-120° all week, several degrees above normal for early to mid-June.Drivers: Make sure your trucks are in tip-top shape, and don’t forget to stay hydrated! Drink some extra water occasionally, even if you don’t feel thirsty, and spend your breaks indoors in cool, comfortable spots. The National Weather Service (NWS) has issued Heat Advisories and Excessive Heat Warnings across the region.

This article was found at Freight Waves, and written by Nick Austin, Director of Weather Analytics and Senior Meteorologist

Indiana Trucking Company to Shut down After Insurance Costs Double, Rates Fall (With Video)

An Indiana-based trucking company will lay off all its drivers and close its doors for good later this month.

A.L.A. Trucking’s 41 drivers and 15 other employees will lose their jobs in the layoff, owner Alan Adams confirmed late Wednesday night.

Adams blamed the company’s rising insurance costs for its ultimate demise, noting that insurance rates at the company jumped to more than $700,000 this year from less than $340,000 last year. He said the jump was due to factors beyond the company’s control, including the way the Federal Motor Carrier Safety Administration (FMCSA) handles Compliance, Safety, Accountability (CSA) scores.

“I didn’t do anything wrong with the company. It’s the way the government has this new grading system that is affecting a lot of companies,” Adams said. “If there’s a situation on the road where a car comes off the on-ramp and bumps into a tractor trailer, until that claim is settled, the insurance company charges a company with that claim.”

While insurance rates may have been what ultimately pushed the company over the ledge, the shutdown comes amid a general slowdown throughout the freight market as a whole. Adams admitted that falling freight rates have taken a toll on the company.

“These rates are ridiculous,” Adams said. “The shippers and receivers are adding to it.”

He said rates have dropped so low, in fact, that the company cannot even afford to haul freight anymore.

Adams lamented the overall state of the trucking industry today and said the shutdown will hit him hard personally, as well as professionally.

“At 61 years old, we put every dime into this,” he said. “I don’t want anything to do with the trucking industry anymore, but it’s all I know. I have to go back to it as a driver. Not as an owner, but I have to go back as a driver and put up with the bull.”

The company’s circumstances have changed dramatically in the last two years. A.L.A. Trucking broke ground on a new headquarters in 2017, setting up shop at a former lumber yard at a cost of nearly $1.3 million, according to Adams.

The company, which was founded in 1988, received a six-year tax abatement which would save an estimated $118,000 upon building its new headquarters. At the time, Adams planned to hire 20 additional drivers to complement its existing 33 drivers, at an additional annual salary cost of $1.1 million.

A.L.A. Trucking is expected to haul its last load by Wednesday, June 26.

This article was first published at FreightWaves and was written by Ashley Coker, Staff Writer

Drivers Received Fewer Pay Increases the First Quarter of 2019

While sign-on bonuses remain a big part of fleet’s recruiting efforts, more recruiters are considering guaranteed pay and transition bonuses. Source: NTI

Fleets are offering fewer drivers wage increases in the first quarter of 2019 when compared to last year but the increases that are being instituted are substantial, according to the latest Quarterly National Survey of Driver Wages from the National Transportation Institute.

As the trucking industry boomed in the past few years, many fleets offered pay increases, sometimes multiple increases in the same year. Across the industry mileage pay rates increased and hit uncharted levels, according to NT, with rates as high as 65 cents per mile for solo drivers.

Despite higher wages across the board, fleets still found it difficult to find and retain qualified drivers.

“Our subscribers tell us that, while freight has dropped and driver churn (turnover) has increased, the need to monitor driver pay attributes that produce desired outcomes remains especially high. Some of these outcomes include referrals, safe, productive driving and fair compensation for down time,” said Leah Shaver, NTI Chief Operating Officer. “We’re in a market with near full employment, and driver expectations are raised after a record year in 2018. In these conditions, the driver situation changes rapidly.”

The quarterly survey also found that while sign-on bonuses remain an important recruiting tool for fleets, some fleets were beginning to take the viewpoint that guaranteed pay and transition bonuses were a better reflection of a driver’s value.

“Our observation is that in Q1 the size of signing bonuses continues to decrease, although the number of carriers offering bonuses continues to remain fairly high,” said Gordon Klemp, NTI chief executive officer and founder. “At the same time, carriers that are utilizing some form of guaranteed pay are seeing a positive impact on turnover and hiring.”

The National Survey of Driver Wages is a survey of recruiting, retention, and compensation executives at dry van, temperature-controlled, flatbed and tanker fleets nationwide. It monitors key industry information on mileage rates, accessorial pay, bonuses, benefits and corporate policies for both drivers and owner operators at for-hire carriers. The full 2019 Q1 National Survey of Driver Wages and its findings are available with a subscription through DriverWages.com.

Article originally found at Trucking Info, written by HDT Staff

Teamsters oppose under-21 CDL Pilot Proposal

The International Brotherhood of Teamsters union has joined the majority of early commenters rejecting a proposed pilot program to lower the restriction for an interstate commercial driver’s license (CDL) from 21 to 18.

Roughly 75 percent of the 180 comments filed so far – just days after Federal Motor Carrier Safety Administration (FMCSA) announced the proposal on May 14 – have come out against the initiative, mostly for safety reasons. The Teamsters agree.

“The decision by the FMCSA to propose a pilot program that would lower the commercial driver’s license restriction from 21 to 18 is of grave concern to those who use the roadways as their workplace every day,” Teamsters General President Jim Hoffa said in a statement.

Hoffa noted that restricting a similar ongoing three-year pilot program to veterans with military driving experience, as stipulated when Congress reauthorized the last highway bill, is needed to counter the “enormous safety risks inherent with having teenagers running tractor trailers” in interstate commerce.

“Ignoring that decision and unilaterally deciding to explore a much broader pilot program represents a dismissive wave of the hand to the will of Congress,” Hoffa said.

Both the FMCSA and the American Trucking Associations (ATA) have cited a shortage of drivers – and the fact that younger drivers are already allowed to drive commercially within state boundaries – as a reason for evaluating their safety performance using an interstate pilot project.

After a bill to allow drivers under 21 to haul commercially was reintroduced in Congress in February with bipartisan support, ATA President and CEO Chris Spear commented that it “demonstrates how real a threat the driver shortage presents to our nation’s economic security over the long-term – and how serious our lawmakers are about addressing it with common-sense solutions,” Spear said.

But the Teamsters contend that the FMCSA’s proposed pilot is attempting to address a driver shortage that “mainly plagues one subset of the trucking industry,” referring to the large-carrier truckload sector, a Teamsters spokesman told FreightWaves. That sector is a significant portion of ATA’s membership.

“Instead of discussing the rampant turnover that part of industry faces, or the low pay and tough working conditions those drivers endure, we are disappointed to see the agency only focus on how they can get more drivers into these jobs with no suggestions of how to improve the quality of the work while they are there,” Hoffa said.

“Younger drivers should not be expected to tolerate substandard working conditions any more than their older counterparts. Asking them to do so while also potentially jeopardizing the safety of all road users only makes this decision more troubling.”

FMCSA’s proposal, in addition to any general comments, is asking for public comment on two specific questions:

What data are currently available on the safety performance (e.g., crash involvement, etc.) of 18-20-year-old drivers operating CMVs [commercial motor vehicles] in intrastate commerce?
Are there concerns about obtaining insurance coverage for drivers under 21 who operate CMVs in intrastate commerce, and would these challenges be greater for interstate operations?

This article was first published at: https://www.freightwaves.com/news/teamsters-oppose-under-21-cdl-pilot-proposal by John Gallagher, Washington Correspondent

5 Reasons To Use A Freight Broker

#5. A broad-based freight brokerage firm is more capable for specialized needs.

A full-service freight brokerage firm is most likely to be knowledgeable and experienced across the broadest range of specialties, even to the extent of having staff who focus on particular areas. The best brokers are part of a wide-ranging firm that provides multi-faceted transportation services to clients. Such complimentary services might include bill administration to help you prevent over payment through oversights or inaccuracies, and account management to help secure the trucks to suit your needs best.

#4. Your process shifts from reactive to proactive.

Many shippers typically don’t think much about their rates until shipping time. Brokers think about rates every day, and continually keep their clients posted on market trends and opportunities. Establishing a relationship with a freight broker can elevate your process from a reactive mode that kicks in when production approaches completion, to a proactive stance that anticipates opportunities in advance, enabling more effective strategy when it is time.

#3. Using a broker reflects the good business practice of outsourcing for non-core services

Organizations regularly outsource for specialized skills outside of their core capabilities, such as accounting or legal counsel. Commercial Transportation is a similarly exacting business function; with so much at stake, it pays—literally—to outsource to a specialist.

#2. If you have shipments originating in multiple cities, a national freight brokerage firm gives you one-stop service for all locations.

A strong freight brokerage firm operating in multiple markets can serve you from a single source, eliminating the hassle of finding a good carrier in every location where you need one. The best freight brokerage firms will provide clients with an account manager who serves as a single point of client contact and responsibility, working with brokers in other locations to deliver the best opportunities in any location, whenever you need them.

#1. You have nothing to lose, and everything to gain.

Although many manufacturers and distributors have contracts with trucking companies to transport their goods, a significant amount of freight transport in North America is handled by freight brokers like Battalion Logistics LLC. Brokers are in business because they save clients time, money and risk, pure and simple. Fifty years ago, when a shipper wanted to hire a truck to move their goods, they just handed over the cash to the trucker, and the deal was consummated. Today, a shipper is faced with a much greater challenge when hiring a trucker. They worry about contracts, liability, insurance, fraud alerts, trucker and driver compliance, and, above all else, actually finding the truck at the right price.

Benefits of dedicated transportation

Dedicated transportation improves service and value thus giving shippers a competitive edge. Since you won’t have the stresses of securing available carriers, checking authority, insurance and rates, you’ll have all the time to narrow your concentration and focus on the real concerns of your enterprise and clients. Battalion Logistics’ extensive expertise, firm commitment to safety, and best in the industry owner operators and fleets realize you optimum service performance.

Shippers also seek to secure dedicated carriers because many carriers utilize the latest tracking technology, giving them access to the status of their freights. At Battalion Logistics LLC, our professional owner operators, and fleet owners use advanced technology that directly links to our easily accessible central logistics command center.

If you’re a shipper, the key to determining the most profitable option lies in closely working with a qualified freight broker or 3PL firm whose primary goal is to boost your business’ performance, increase efficiency and minimize overhead costs. Through alliances, shippers and dedicated carriers can become true business partners that provide premium solutions that achieve quality and excellence.