Letters: Trucking’s Real Cost, Soaring Fuel Prices, Mexican EOBRs
These Letters to the Editor appear in the May 2 print edition of Transport Topics. Click here to subscribe today.
Trucking’s Real Cost
My ex-wife’s uncle owned a couple of tractors and trailers in the 1950s. He was hauling processed chicken between Fort McPherson in Atlanta and Fort Benning in Columbus, Ga. During the summer months in the Georgia heat, the chances for a cargo claim increased as the temperature rose and the chickens got heated. Thus, one of the first refrigerated trailers was invented.
He cut a hole in the nose of the trailer, installed a rack that would hold a 500-pound block of ice and used the wind generated from the transit movement to cool the chickens. Atlanta-based carrier Refrigerated Transport was the result of this innovative thinking. He was an intelligent man and knew what it takes to make money.
After selling his business, he attempted to organize what he thought was the most powerful trucking entity in the country — the independent and small trucking companies. As smart and innovative as this man was, his attempt to organize such a diverse group was met with a frosty acceptance. Small trucking companies are fiercely independent and don’t want to answer to anybody except themselves.
The result of this independence for a vast majority of these small carriers is the resulting inadvertent alignment with the big third-party logistics providers, who supply needed freight to these carriers.
The inherent problem that resulted is that the 3PL representatives assigned to these accounts are no more than freight-rate regurgitators. A highly stressed middle management answering to a top management with profit-margin results their only
goal pressures the front-line carrier contacts to offer rates below the carrier’s cost. With 3PLs, size matters (negatively in 2010).
This whole concept was reinforced by your April 4 front-page story, “Third-Party Logistics: Outsourcing by Small Shippers Fueling Growth Among Brokerage Firms, Freight Forwarders.”
It is evident to me that the bigger 3PLs are adding trucks to their array of services because there are fewer trucks on the road. The profitable year enjoyed by many of these 3PL companies came on the back of the unprofitable year experienced by the small fleets and independent truckers that are forced to haul highly sought-after freight with monies decimated to a fraction of what the cost was to the carrier.
The small trucking companies that survived were skillful, but also very lucky.
The freight is coming back. Trucks are becoming harder to find. Are the small trucking companies and cowboy independents going to continue to run freight below cost? My guess, sadly, is “yes.”
The trucking industry was deregulated a little more than 30 years ago, and a big percentage of the truck lines that didn’t understand their costs are now out of business.
The shipping and manufacturing community has very little respect for trucking people, from the top to the bottom, i.e., “plain vanilla — you are all the same.”
I think this is the result of truckers not respecting the service they provide. I find this to be especially true with the big carriers in major negotiations. This may be the last time for some of us to stand our ground on needed rate increases.
Surprise me, truckers. Respect your service and demand a fair rate. Believe me, 3PLs don’t really believe that a shortage of trucks on the road fuels their growth. What fuels their growth is their relationship with the shipper and a willing trucker carrying the burden of the cost.
The addition of assets to their array of services is going to open a lot of 3PL eyes to the real cost of trucking.
Bernie Scruggs
President
TTX Inc.
Chicago
Soaring Fuel Prices
Your comment, “Not that we can do much about skyrocketing prices except pay and grumble,” in the March 14 editorial, “Out-of-Control Fuel Prices,” should have included the option to adjust accordingly.
Consider the 6.5-mile-per-gallon truck at $3 a gallon costing $46.15 per 100 miles. Slowing down and attaining 7 mpg at $4 a gallon is costing $57.14 per 100 miles, but the alternative at 6.5 mpg is $61.54.
I know — it’s a matter of service, getting loads delivered on time, etc.
Also, not every fleet can take advantage of the more fuel-efficient 2010-compliant engines, and not every fleet can afford to retrofit aero-efficient components.
I noticed few truckers running the faster 70 mph posted speeds across the Ohio Turnpike, but I do see more fleets considering 62 mph.
Chuck Blake
Senior Technical Sales
Support Manager
Detroit Diesel
Detroit
Why should taxpayers’ money be wasted on an inquiry when the answers are already known and the politicians bought off by the oil companies will refuse to take any action on behalf of the consumer anyway?
I also wonder why the powers-that-be can set a minimum price floor on a bottle of liquor but can’t set a maximum price ceiling on a gallon of gasoline?
“Big Oil” still would be reaping billions in profits even if gasoline were selling for $2 per gallon. This $4-plus is just frosting on the cake for the greedy CEOs and parasitic speculators.
Rick Sparkes
Technical Editor
Motor Information Systems
Troy, Mich.
EOBRs for Mexico
In late 1999, our company installed electronic onboard recorders in our fleet of 240 trucks at a cost of $886,000. We were willing to spend the money on technology that helped us increase our fleet miles-per-gallon from 6.1 to 6.4 and decrease idling time from 14% to 5%.
Our hours-of-service violations were virtually eliminated because we were willing to spend the money — and so should be companies south of the U.S. border.
I monitored our system for six years. Who will be monitoring their system? And what authority will they have over the Mexican drivers and fleets?
Billy Cureton
Truck Driver
Greenville, S.C.
