In 2018, the trucking industry faced a major disruption from the U.S. Department of Transportation’s mandate to install electronic logging devices (ELDs) in all trucks, often adding a day or more to transportation times.
“That’s one trend that has gone up,” Ron Miller, president of Cleveland’s Miller Quality Produce Inc. BB #:152697 says, “the cost of freight. It’s due to the ELD system. Now, when it says you’re shutting down, you’re shutting down,” he adds, referring to required stops in journey enforced by the new devices. “Now a trip that used to take one day takes two days.”
Most Midwest sources, however, agree that the worst is over with ELD transition.
“We’re past the critical stage,” says Ron Carkoski, CEO of New Harvest Foods, a newly created merger of H. Brooks and Company BB #:100563 and J & J Distributing Company that is headquartered in Minneapolis.
Mike Bilokonsky, managing member of Cincinnati’s Whitehorse Freight, LLC, BB #:323900 concurs, saying about ELDs, “Carriers have gotten acclimated with how to work with them.” He notes that “2018 was a big scare; prices were a bit inflated. But the ELD surprise has been handled.”
Is trucking capacity the same concern that it was last year? No, says Bilokonsky, “year over year is night and day.” He does not see any shortage of truckers in the Cincinnati market.
Sam Maglio, president of Maglio Companies, headquartered in Glendale, WI, BB #:105281 sees the same picture in Minneapolis. “Getting trucks is not a problem,” he says.
In Chicago, Strube reports, “good truck drivers are in very short supply, but for wages, we’re 100 percent union, so wages are set.”
In Wisconsin, Bill Dietz, president of Heartland Produce Company in Kenosha, WI, BB #:133466 comments, there was “more of a shortage last year, whereas this year supply has been ‘ample.’ Freight rates from the West Coast much more stable this year. And there are more intermodal options.” Overall, he says, freight “hasn’t been a headache this year.”
Nevertheless, Miller underscores that much is tied to the cost of fuel.
“When the cost of fuel goes up, product and sales sometimes go down. It’s crazy, because we’re talking about food, and people gotta eat regardless.”
It’s the “single most distressing factor: when fuel goes through the roof, the cost of product goes up. High fuel prices are no good for any industry.”
This is a multi-part spotlight feature on Midwest produce adapted from the October 2019 issue of Produce Blueprints.