Up Snarls Affect Trucking Industry
Transportation snarls on Union Pacific’s railroad lines have rippled through the trucking industry, pushing the limits of businesses that were already struggling with a shortage of trucks and drivers.
Business has been overwhelming for over-the-road trucking firms in most parts of the country and the result is fees 10 to 20 percent higher for new shipping contracts.
“A huge amount of the daily rail traffic is now going over the road,” said Todd Aaron, senior vice president of Stevens Transport Inc., which has a fleet of 910 trucks and 1,200 trailers. “Trucking prices have gone up because we’re at capacity. It’s a supply and demand industry. We’re all running at 100 percent capacity.”
Weeks before Christmas, when stockrooms are supposed to be filled and truckers can usually take a vacation, loads of goods are still being hauled to malls and shopping centers. The strong economy had already increased demand for room in the backs of trucks and with the rail problems, the transportation bottlenecks reached crisis proportions for many parts of the economy this fall.
“Sometimes after the Christmas merchandise hits the stores, things slow down a little bit. This year, there’s not enough of a lull to even pick up the rail business,” said Rick Todd, president of the South Carolina Trucking Association.
The government stepped in to try and help clean up the mess in October. On Thursday, the Surface Transportation Board extended an emergency order that allows competitors of Union Pacific to use the railroad’s tracks through March 15.
The gridlock on Union Pacific’s lines has sent more business onto the roadways, but trucking companies have been in no position to take full advantage of the new business.
“They’ve got equipment shortages and driver shortages. I’ve seen estimates of shortfalls of 40,000 to 400,000 drivers,” said University of North Texas economist Bernard Weinstein, who follows Union Pacific for the Texas Railroad Commission.
Truckers say they’d like to take all of the railroad’s extra business, but they just can’t.
“In this part of the country, the extra capacity is not there to absorb all of the business,” Todd, of the South Carolina trucking group, said. “I think that’s probably exacerbated the problem with Union Pacific, because the truckers are not there for the shippers to fall back on.”
The extra business is expected to mean big profits for trucking companies this year, but not all truckers will experience the windfall. On the West Coast, stagnate rail yards and bottlenecks at ports in Long Beach, the nation’s largest for containerized cargo, and neighboring Los Angeles have meant truckers couldn’t even get to their cargo.
“Our trucks couldn’t get in to move anything out,” said Beau Biller of the California Trucking Association. “Our guys are losing money. The port was so clogged they wouldn’t allow the truckers in with empty containers.
“You’re talking about back ups that have just been devastating.”