ARLINGTON, VA. At the first-ever National Summit on Agricultural & Food Truck Transportation, concerns were rife among attending carriers, industry experts and government officials alike as to whether there would be enough trucking capacity in the future to support the booming U.S. agricultural market and if security could be adequately maintained.
“The shipment of chemicals and fertilizer remain our two biggest concerns,” Agriculture Sec. Mike Johanns told FleetOwner here at the summit meeting. “We saw how common fertilizer could be put to deadly use in the Oklahoma City bombing. There’s always that threat of a hijacking or of cargo disappearing: that’s why we spend a lot of time on homeland security issues in this industry – and that’s only going to increase.”
He added that commercial trucking is a key partner to agriculture, and not just for shipping commodities. “We’re also talking about the trucks that are the lifeline of the food supply,” he said. “The agricultural sector is the largest user of freight transportation services in the country. Trucks handle about 90% of all food shipments and nearly half of all grain movements in our country. So the challenge now is to project the demands of this decade and make certain that this partnership is not only a part of the business of U.S. agriculture but also contributes to the success of U.S. agriculture.”
Kelly Morrow, vp-transportation for St. Paul, MN-based private fleet CHS Inc., added that trucks are the backbone of the agricultural market’s supply chain, but trucking is getting strained in the face of rising demand.
“There is simply not enough manpower or equipment to satisfy the needs of this industry right now,” he said. “We’re just not finding enough drivers today. They don’t want to deal with seasonality of the work, which produces big peaks in orders, and they find getting the necessary background checks and hazmat endorsements hassle.”
Demand, however, is soaring. Sec. Johanns said farm cash receipts should reach a record $259 billion in 2007. This would be up $16 billion from last year and the sector’s fourth consecutive record year in a row.
“We’ve upped our agricultural export estimates for the year to $78 billion – that means a one-year increase of $9.3 billion, which is the second largest year-to-year increase again on record,” he added.
Not only do truckers have to cope with that level of demand, their expenses are rising as well, noted CHS’ Morrow.
“The cost of doing business in this industry is also rapidly increasing – it went up 25% to 35% last year [for agricultural haulers] as drive pay increases and the cost of new equipment went up,” he said. CHS, which operates 1,400 pieces of equipment, said its Class 8 tractor prices jumped to $110,000 this year from $83,000 in 2004, with trailer prices going up to $95,000 from $72,000 in 2004.
Despite those challenges, however, solutions must be found, said Charles “Shorty” Whittington, president of Lafayette, IN-based bulk hauler Grammer Industries. “We can’t ignore how vitally important truck transportation is to get commodities moved from start to end,” he said.
