By Ernie Neff and Len Wilcox
A federal rule requiring use of electronic devices to log truckers’ driving time was a boon to Florida vegetable grower, packer and shipper Chuck Obern, at least soon after implementation. Obern said the rule increased the time and cost of shipping vegetables from the West and Mexico to New York, giving Florida growers a competitive advantage. He doesn’t know if that advantage will last, but he’d like to know if it will.
The Electronic Logging Devices (ELD) rule went into effect Dec. 18; it is commonly referred to as “the E-log rule.” It requires ELDs to synchronize with vehicle engines to automatically record driving time. Previously, truckers could keep manual logs that showed whether they were complying with hours-of-service rules. Those rules allow truckers to work a maximum of 14 hours and drive a maximum of 11 hours during a work shift, according to a Federal Motor Carrier Administration website. “The (ELD) rule requires truckers to electronically clock time in a system that cannot be fudged,” said Gene McAvoy, Extension director and regional vegetable agent in Hendry County, Florida.
Obern, whose C&B Farms near Clewiston grows several hundred acres of vegetables, said there was already a trucker shortage around Christmas and New Year’s Day as many drivers took the holidays off. “The E-log rule exacerbated the shortage,” he said, because some older truckers decided to retire rather than comply.
Obern said largely as a result of the driver shortage, shipping rates to New York from Nogales, Arizona, and from McAllen, Texas, soared. The rates then declined somewhat, but were still elevated as of Feb. 1. Obern said rates were $4,000 to $5,000 per load from McAllen to New York, and $6,000 to $7,000 from Nogales to New York.
FLORIDA: CHEAPER, FASTER, FRESHER
Meanwhile, “Florida rates really haven’t changed much,” Obern said. He reported shipping rates from Florida to New York remained fairly steady at about $3,000 per load. Obern estimated the lower shipping rates gave Florida growers an average price advantage of about 75 cents per box over Western and Mexican growers for a 1,800-box load of mixed vegetables. Florida’s price advantage could be as much as $2 to $3 per box “depending on the commodity,” Obern said.
According to Obern, the ELD rule also increased the number of days it takes to get a load to New York from Nogales and McAllen to four and three days, respectively. By contrast, vegetables can get from Florida to New York in 36 hours, he said. In addition to arriving in New York at a lower cost, the Florida vegetables also arrive fresher. “Fresh vegetables have a short shelf life,” Obern noted.
“Currently we’re enjoying the favorable position we’re in,” Obern said. “We’re more competitive price-wise. It’ll be interesting to see what the impact will be” in the future. He said he hoped someone with the University of Florida would conduct a study to determine if Florida’s economic advantage will hold.
McAvoy, the Extension director and vegetable agent, has heard from other Florida vegetable growers who believe the ELD rule gave them an advantage over Western and Mexican growers. He said the rule “substantially increased the cost of freight from Mexico and the West Coast, conferring a several-thousand-dollar-per load advantage to Florida growers.”
EFFECTS ON WESTERN AND MEXICAN SHIPPERS
McAvoy said he has heard that Walmart “is trying to renegotiate contracts from East Coast producers to reduce their reliance on West Coast shippers” as a result of the ELD rule. McAvoy thinks the rule “might lead to more business” for Florida growers who suffer from competition with low-cost vegetable producer Mexico. He said the rule change may not lead to price increases for Florida growers.
Obern and McAvoy both said some Mexican vegetable producers have dropped their already low prices to compensate for higher shipping costs caused by the ELD rule. “But that’s not sustainable,” Obern said. He added that some West Coast shippers are trying to get team drivers so they can get loads to New York more quickly. But that greatly increases salary and shipping costs, he noted.
Some West Coast shipping companies reported that the ELD rule has had minimal effect on their expenses. One produce company representative said its major issue was making sure trucks were loaded quickly to avoid down time. The company had to expedite loading to keep its drivers on the road as long as allowed.
Find this story in the April 2018 issue of VSCNews magazine. Not a subscriber? Click here to subscribe today.
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