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Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Regulated to death
()
Date: July 16, 2019 08:54AM
Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Market conditions and CARB cited for failure reason
Craig Fuller, CEO at FreightWaves Craig Fuller, CEO at FreightWaves, July 14, 2019
The trucking apocalypse is upon us and it has taken its latest victim. This time, it’s a 40-year-old carrier out of California. Timmerman Starlite Trucking, Inc. of Ceres, California announced that it would be shutting down, placing 30 employees into the unemployment line effective immediately. Ceres is a suburb of Modesto, California, a mid-sized city 100 miles east of San Francisco. Starlite had a fleet of 30 trucks, 150 trailers and 28 drivers, according to Federal Motor Carrier Safety Administration data.
Owner Colby Bell cited a tough freight market and environmental regulations as the primary factors in the company’s failure, according to the Ceres Courier, which broke the story. Starlite also announced its closure on its Facebook page.
“We tried to provide a healthy work environment for our employees and give them the best wages and benefits we could,” Bell said. “But in the end, the rates that were available did not support the cost structure needed to compensate our employees appropriately.”
The company served clients through an 11-state region, spanning from the Rocky Mountains to the Pacific coast.
Long haul trucking spot rates are at their lowest levels in the past few years, off by over 30 percent since last year’s peak.
Even more challenging, trucking volumes have been running between 2 percent and 7 percent in equivalent days in 2018, starting with a large drop in mid-May.
While rates and load volumes reflect the demand side of the freight market and paint a picture of the revenue conditions for carriers, the profit story is much worse. In the past two years, carriers have seen significant cost inflation and operational pressure in almost every aspect of their businesses.
Wage increases for drivers have increased double digits, insurance renewal rates have gone up and equipment is more expensive to maintain. Carriers have been forced to buy electronic logging devices, running their trucks with an inflexible clock.
Fuel expenses, particularly in a tax- and regulation-loving state like California have also been way up in the past three years. Since Feb 2016, retail diesel prices in the state have increased from $2.29/gallon to $3.95/gallon, roughly equivalent to $.25 per mile. At $1.49 per mile, this will cost a carrier 17% of their operating profits if they aren’t on a fuel-surcharge program.
Larger carriers are able to recover most, if not all of this in the form of a fuel surcharge. Unfortunately, Starlite was likely too small to have much leverage of their shipper relationships to do so.
Retail average diesel fuel prices in California have shot up 75 percent since Feb 2016, while only jumping 58 percent on a national basis during the same period.
California has added two fuel and excise taxes during the period, first with a 20-cent per gallon increase in 2017 and another 20-cent increase initiated this July.
If taxes weren’t enough of a burden for California’s operators, the company’s environment czar, the California’s Air Resources Board (CARB), creates its own set of challenges.
For the past decade, CARB has required carriers to buy and operate trucks that operate under a more stringent set of emissions regulations.
In describing the plight of environmental and business regulations on Starlite, Bell was quoted in the Turlock Journal:
“The air’s a lot cleaner today because of the work the industry has done — and we’re proud of that — but the rate structure is [holding arm flat] and the cost structure is like this [arm at an incline]. The family was just in a position where we could not continue to operate without risking financial devastation.
“If you’re an interstate carrier that operates in 50 states and you can make money in 49, you can lose a little in California while the pressure’s on, and over time you know that things are going to equalize. But, yeah, the smaller carriers are stressed. Most of them are family companies. They’re not capital rich and it’s a heavy capital industry to be in. They’re pulling $200,000 worth of equipment and that’s a lot of money when you think about almost a 40 percent increase in costs over the last 10 years but no change in the revenue.”
Few would deny that California has benefited from cleaner air, but tax increases, inflexible labor laws and a litigious court system have all made the operating environment for California-based trucking companies extremely difficult.
Last year, we wrote a commentary about California’s hostile environment for the trucking industry labeled “California’s Hostile Environment for the Trucking Industry.”
California, perhaps more than any other large state, is incredibly dependent on the trucking industry to keep the economy humming along. With a large agriculture industry, a sizable industrial sector and being home to the biggest port in North America, a third of all jobs in the state are in logistics-dependent industries and trucking is still the largest logistics mode by far.
While it is too late for Starline and Bell, chief executive officer of the California Trucking Association Shawn Yardon issued a statement about the closure, “I am saddened to learn of Starlite’s closure and this is further proof that California must take a very hard look at its business environment.”
If you are keeping score, this is the sixth major trucking company failure of 2019. LME, a Midwest LTL carrier also shut it’s doors last week.
https://www.freightwaves.com/news/trucking-apocalypse-continues-california-truckload-carrier-latest-victim-regulations-blamed
https://www.freightwaves.com/news/california-assaunt-on-trucking
Market conditions and CARB cited for failure reason
Craig Fuller, CEO at FreightWaves Craig Fuller, CEO at FreightWaves, July 14, 2019
The trucking apocalypse is upon us and it has taken its latest victim. This time, it’s a 40-year-old carrier out of California. Timmerman Starlite Trucking, Inc. of Ceres, California announced that it would be shutting down, placing 30 employees into the unemployment line effective immediately. Ceres is a suburb of Modesto, California, a mid-sized city 100 miles east of San Francisco. Starlite had a fleet of 30 trucks, 150 trailers and 28 drivers, according to Federal Motor Carrier Safety Administration data.
Owner Colby Bell cited a tough freight market and environmental regulations as the primary factors in the company’s failure, according to the Ceres Courier, which broke the story. Starlite also announced its closure on its Facebook page.
“We tried to provide a healthy work environment for our employees and give them the best wages and benefits we could,” Bell said. “But in the end, the rates that were available did not support the cost structure needed to compensate our employees appropriately.”
The company served clients through an 11-state region, spanning from the Rocky Mountains to the Pacific coast.
Long haul trucking spot rates are at their lowest levels in the past few years, off by over 30 percent since last year’s peak.
Even more challenging, trucking volumes have been running between 2 percent and 7 percent in equivalent days in 2018, starting with a large drop in mid-May.
While rates and load volumes reflect the demand side of the freight market and paint a picture of the revenue conditions for carriers, the profit story is much worse. In the past two years, carriers have seen significant cost inflation and operational pressure in almost every aspect of their businesses.
Wage increases for drivers have increased double digits, insurance renewal rates have gone up and equipment is more expensive to maintain. Carriers have been forced to buy electronic logging devices, running their trucks with an inflexible clock.
Fuel expenses, particularly in a tax- and regulation-loving state like California have also been way up in the past three years. Since Feb 2016, retail diesel prices in the state have increased from $2.29/gallon to $3.95/gallon, roughly equivalent to $.25 per mile. At $1.49 per mile, this will cost a carrier 17% of their operating profits if they aren’t on a fuel-surcharge program.
Larger carriers are able to recover most, if not all of this in the form of a fuel surcharge. Unfortunately, Starlite was likely too small to have much leverage of their shipper relationships to do so.
Retail average diesel fuel prices in California have shot up 75 percent since Feb 2016, while only jumping 58 percent on a national basis during the same period.
California has added two fuel and excise taxes during the period, first with a 20-cent per gallon increase in 2017 and another 20-cent increase initiated this July.
If taxes weren’t enough of a burden for California’s operators, the company’s environment czar, the California’s Air Resources Board (CARB), creates its own set of challenges.
For the past decade, CARB has required carriers to buy and operate trucks that operate under a more stringent set of emissions regulations.
In describing the plight of environmental and business regulations on Starlite, Bell was quoted in the Turlock Journal:
“The air’s a lot cleaner today because of the work the industry has done — and we’re proud of that — but the rate structure is [holding arm flat] and the cost structure is like this [arm at an incline]. The family was just in a position where we could not continue to operate without risking financial devastation.
“If you’re an interstate carrier that operates in 50 states and you can make money in 49, you can lose a little in California while the pressure’s on, and over time you know that things are going to equalize. But, yeah, the smaller carriers are stressed. Most of them are family companies. They’re not capital rich and it’s a heavy capital industry to be in. They’re pulling $200,000 worth of equipment and that’s a lot of money when you think about almost a 40 percent increase in costs over the last 10 years but no change in the revenue.”
Few would deny that California has benefited from cleaner air, but tax increases, inflexible labor laws and a litigious court system have all made the operating environment for California-based trucking companies extremely difficult.
Last year, we wrote a commentary about California’s hostile environment for the trucking industry labeled “California’s Hostile Environment for the Trucking Industry.”
California, perhaps more than any other large state, is incredibly dependent on the trucking industry to keep the economy humming along. With a large agriculture industry, a sizable industrial sector and being home to the biggest port in North America, a third of all jobs in the state are in logistics-dependent industries and trucking is still the largest logistics mode by far.
While it is too late for Starline and Bell, chief executive officer of the California Trucking Association Shawn Yardon issued a statement about the closure, “I am saddened to learn of Starlite’s closure and this is further proof that California must take a very hard look at its business environment.”
If you are keeping score, this is the sixth major trucking company failure of 2019. LME, a Midwest LTL carrier also shut it’s doors last week.
https://www.freightwaves.com/news/trucking-apocalypse-continues-california-truckload-carrier-latest-victim-regulations-blamed
https://www.freightwaves.com/news/california-assaunt-on-trucking
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Good riddance
()
Date: July 16, 2019 09:03AM
^^^ BULLSHIT! Nobody is guaranteed any right to do business profitabLY. If you can't hack it, you fold. It's the American way.
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Mr Roboto
()
Date: July 16, 2019 09:54AM
Fuck them - trucking is gonna be driverless long before automobiles anyway.
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Rolling home
()
Date: July 16, 2019 12:17PM
Don't be too sure. Metro trains have basically been run by computers for years, but they still put a human 'operator' in the cab.
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
OpenPilot User, comma AI
()
Date: July 16, 2019 12:20PM
It's already here, they will still have babysitters in the trucks, and they will be paid a lot less since they are doing a lot less.
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
3rggffd
()
Date: July 17, 2019 10:39AM
trucking is increasing not decreasing
* california? shipping goods from china port? an asian owned company hiring muslims has taken over in that area
* trucking is using younger lower paid drivers, illegal aliens, causing more highway catastrophy - than in the past
* california? shipping goods from china port? an asian owned company hiring muslims has taken over in that area
* trucking is using younger lower paid drivers, illegal aliens, causing more highway catastrophy - than in the past
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Sky.Net
()
Date: July 17, 2019 03:31PM
Rolling home Wrote:
-------------------------------------------------------
> Don't be too sure. Metro trains have basically
> been run by computers for years, but they still
> put a human 'operator' in the cab.
They need that Dulles terminal subway jawn...that trick runs its own damn self.
-------------------------------------------------------
> Don't be too sure. Metro trains have basically
> been run by computers for years, but they still
> put a human 'operator' in the cab.
They need that Dulles terminal subway jawn...that trick runs its own damn self.
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
iuraf
()
Date: January 20, 2021 07:26AM
There is not a single guarantee that you will be able to make any profits out of a company. The way I am seeing it, there are 2 options. Either you are doing a terrible job at the administration of the company or you have given up too early. Good things take time, especially if we talking about making money. You cannot expect for anything to blow overnight. You need to have patience. And since we are talking about transportation, I would recommend you to check https://www.mactrans.ca/our-services-toronto-montreal/less-than-truckload-ltl/ if you are interested. Maybe you will get inspired by them
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
Government Can't Deliver Mail
()
Date: January 20, 2021 07:40AM
They hide behind unions , it's going to get far worse when the panderers come in today
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
WMATA - Sleeping on the Job
()
Date: January 20, 2021 08:05AM
Rolling home Wrote:
-------------------------------------------------------
> Don't be too sure. Metro trains have basically
> been run by computers for years, but they still
> put a human 'operator' in the cab.
Unfortunately, the union WMATA "operator" could be asleep at the wheel.
Are WMATA employees allowed to sleep during their shifts?
-------------------------------------------------------
> Don't be too sure. Metro trains have basically
> been run by computers for years, but they still
> put a human 'operator' in the cab.
Unfortunately, the union WMATA "operator" could be asleep at the wheel.
Are WMATA employees allowed to sleep during their shifts?
Re: Trucking apocalypse continues: California truckload carrier latest victim. Regulations blamed.
Posted by:
farui
()
Date: January 20, 2021 10:12AM
iuraf Wrote:
-------------------------------------------------------
> There is not a single guarantee that you will be
> able to make any profits out of a company. The way
> I am seeing it, there are 2 options. Either you
> are doing a terrible job at the administration of
> the company or you have given up too early. Good
> things take time, especially if we talking about
> making money. You cannot expect for anything to
> blow overnight. You need to have patience. And
> since we are talking about transportation, I would
> recommend you to check
> https://www.mactrans.ca/our-services-toronto-montr
> eal/less-than-truckload-ltl/ if you are
> interested. Maybe you will get inspired by them
Obviously the above is spam, but it still displays an appalling ignorance of the situation confronting many smaller trucking companies. Trucking is a capital intensive industry that operates on extremely small margins. It does not take much to tip a company over the edge. Big companies have the clout to negotiate deals that are flexible enough to adjust rates to reflect changing costs. Smaller companies don't.
-------------------------------------------------------
> There is not a single guarantee that you will be
> able to make any profits out of a company. The way
> I am seeing it, there are 2 options. Either you
> are doing a terrible job at the administration of
> the company or you have given up too early. Good
> things take time, especially if we talking about
> making money. You cannot expect for anything to
> blow overnight. You need to have patience. And
> since we are talking about transportation, I would
> recommend you to check
> https://www.mactrans.ca/our-services-toronto-montr
> eal/less-than-truckload-ltl/ if you are
> interested. Maybe you will get inspired by them
Obviously the above is spam, but it still displays an appalling ignorance of the situation confronting many smaller trucking companies. Trucking is a capital intensive industry that operates on extremely small margins. It does not take much to tip a company over the edge. Big companies have the clout to negotiate deals that are flexible enough to adjust rates to reflect changing costs. Smaller companies don't.