Sustainability is clearly a recurring hot topic in the produce industry, one that will certainly be deliberated at the upcoming Produce Marketing Association conference.
At the June United Fresh convention and expo in Chicago, I had the opportunity to listen to an excellent presentation on sustainability and its effects on the produce sector.
One area of great concern is the regulatory aspect of these initiatives for the trucking industry. With more than 1.4 million employees in the U.S. alone, even a seemingly small and harmless regulation can complicate the lives of tens of thousands of companies.
The most recent regulations on truck drivers have further reaching implications than most would anticipate. Let’s take a look at how the landscape has changed since July of 2013 with some of the major changes.
Hours of service — The total number of hours a driver can be “on duty” has been reduced from 82 hours down to 70 hours a week. This rule effects the long-haul drivers more than any, as they are tied into particular loads for a greater period of time.
Restricted driving hours – During a driver’s 34 hour restart (mandatory break), they must be off of the road twice from 1-5 a.m. This puts more trucks back on the road during early rush hour, which can add to the complexities of ensuring on-time delivery.
CARB – The California Air Resources Board now requires all carriers to adhere to their emissions requirements, regardless of the home operating state. The cost of complying with CARB can be upwards of $15,000-plus to upgrade their equipment. Many who cannot afford the upgrades have now removed California completely from their business plans.
What do all of these new regulations mean to you and your customers?
Reduced capacity — With reduced capacity the law of supply and demand comes into play and this is most noticed by the increase of trucking rates. DAT reported the increase (on average) has been anywhere form 4% to 8% year over year, based on trailer type, lane and time of the year. According to the U.S. Department of Agriculture, grocery prices have risen approximately 2.5% year over year.
Increased transit times — More restrictive driving hours can complicate the fresh delivery process, and the end-user could end up having shorter shelf-life options for produce in particular.
Increased attrition in the trucking Industry – The truck driver turnover rate has sustained above 90% for eight straight quarters, further adding to complications with on safety and employment sustainability. Many of the experienced drivers may become frustrated with increased regulations and it could be a reason for them to leave the industry entirely.
With all of us being responsible members of the business community, we need to remain vigilant in our efforts to ensure that our government, across all levels, understands the importance and far reaching implications of new regulations.