Besides the daily challenges drayage truckers face to keep their small businesses afloat at the Port of Oakland, some are questioning whether they still will be operating this time next year. That’s because of an emissions rule in California that is requiring them to upgrade their trucks to include 2010 model year or newer diesel engines by the end of the year.
Bill Aboudi, president of AB Trucking in Oakland, planned to upgrade his aging fleet by replacing half of his trucks this spring and the remainder in the fall to comply with the California Air Resources Board (CARB) Truck and Bus rule deadline of Dec. 31.
Those plans are on hold for now, Aboudi said, as used truck prices continue to soar because of semiconductor shortages, which have caused larger fleets to hold on to their old equipment longer because of new truck order delays. He and other drayage companies typically buy their used trucks from over-the-road fleets, which are typically on a three-year depreciation schedule.
“I get asked about a possible CARB extension every single day by owner-operators,” Aboudi told FreightWaves. “CARB is creating uncertainty if they will be able to earn a living next year.”
The CARB rule covers all diesel vehicles with a manufacturer’s gross vehicle weight rating greater than 14,000 pounds.
Lynda Lambert, public information officer for CARB, said there is a provision in the Truck and Bus rule for new truck buyers who are experiencing manufacturer delays, but there’s no extension for California truckers who planned to buy used trucks but either can’t find one or can’t afford one because of supply constraints.
J.D. Power Valuation Services reported that used truck pricing in calendar year 2021 soared over 96% higher than in 2020 because of the chip import issues, which have drastically impacted the new truck market.
A new truck can have up to 35 chips that are used to collect data.
Prior to these challenges, Aboudi said, he would typically be able to find a used 2011 to 2016 model year truck for between $30,000 and $50,000 for his drayage operation. But not now.
He recently looked at a late-model truck with over 500,000 miles. The dealership was asking nearly $130,000, his initial budget to purchase three trucks.
Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, headquartered in Upland, California, estimates that as many as 85,000 trucks will be affected by the CARB rule based on the government agency’s data.
He said WSTA is talking with other trade groups about submitting “a unified request for a delay in the CARB rule.”
“If people think there’s a supply chain issue right now, imagine taking that many trucks out of service that can’t be replaced because of the computer chip shortage,” Rajkovacz told FreightWaves. “We believe a delay is warranted because of significant supply chain issues such as the inability to get a new truck or even buy a compliant used truck.”
One owner-operator in California made the decision to retire after he received an offer he couldn’t refuse for his late-model truck, which had around 400,000 miles.
“I planned to stay in trucking for another year or two and my truck wasn’t even for sale, but a guy offered me nearly triple what it would typically go for in a normal year,” the driver, who didn’t want to be named, told FreightWaves. “I’ve been at this a long time and my truck was paid off so I weighed hanging in there a little longer and possibly having a major mechanical problem, or getting out with a little money in my pocket. I took the money.”
Two owner-operators Aboudi knew in Oakland retired this year rather than continue hunting for trucks in an already tight used market. He said some drivers with trucks that meet CARB’s 2007, 2008 and 2009 diesel engine requirement want an extension. This would give drayage haulers time to fix their current equipment and let the used truck market cool down.
“Port truckers are under a lot of stress already and we need an extension to the CARB rule by a year or two to let prices of trucks drop a little and we can rest a little easier,” Aboudi said. “If not, some aren’t going to be able to stay in business because they just can’t afford to buy used trucks at these prices.”
Frustration mounts among truckers, ag exporters
Drayage companies and agricultural exporters say recent attempts to address the supply chain challenges at the Port of Oakland are shortsighted because the steamship lines and terminal operators aren’t being held accountable for appointment time cancellations or delays and short receiving windows.
The U.S. Department of Agriculture recently announced that it is partnering with the Port of Oakland to fund a 25-acre container staging area for ag exports. However, port officials and the USDA failed to mention that more than a dozen trucking companies were evicted from the Howard Terminal to make this space available.
Some were rehomed to the same area they were evicted from six months ago. Others decided the cost of doing business in Oakland was too high and left.
One drayage company owner estimated the cost to relocate his company to the Howard Terminal six months ago was about $10,000, including moving his trucks and office trailers and hooking up to electricity and other utilities. Now he may be forced to move and pay those costs again.
Bryan Brandes, maritime director for the Port of Oakland, said the export yard will open on March 1 and “is designed to assist our exporters and relieve congestion at the marine terminals in order to better utilize our waterfront land.”
“The trucking companies dislocated by the empty yard were all offered space within the seaport and all understand these are short-term month-to-month agreements,” Brandes told FreightWaves.
He said the empty yard will better utilize the land as the dry empty containers will be grounded instead of on chassis, “more than quadrupling the capacity.”
The USDA will be offering a $125 incentive for each empty sourced from this yard that’s used for exporting agricultural products from Oakland, according to Brandes.
“The Port of Oakland will continue to offer limited truck and container parking as we modernize our seaport,” Brandes said. “Truck and container parking is not traditionally found within seaports and has only been available recently in the Oakland seaport with the closure of two marine terminals in 2014 and 2016.
Miguel Silva, CEO of Intermodal Logistics in Oakland, has concerns about how the empty yard for ag exports will be utilized.
“How is the empty yard going to make ships show up on time?” Silva asked. “How is the empty yard going to make the terminals be more efficient in the import and export rows?”
Cory Peters, president of Best Drayage, which operates about 75 trucks in Oakland, also has questions about how the yard will be used as well. The majority of his customers export agricultural products from California’s Central Valley.
“The biggest hurdles for ag shippers right now are being able to get space on the vessels and terminals receiving the loads in a timely manner,” Peters told FreightWaves. “Having an empty yard is nice but the steamship lines still need to provide empties. Right now that’s one of the biggest issues is the steamship lines either don’t have enough equipment or refuse to release that equipment for export bookings so they’ll ship them back overseas empty.”
Peters said some of the steamship lines’ receiving windows for export containers have dropped from four or five days to maybe four hours, if at all.
“If your load doesn’t make it in during those four hours, you have to take it over to your yard and store it until the next vessel opens, which may be a week or two later to find one that’s going to the same destination,” he said. “The steamship lines and terminals have made it clear they don’t care about export customers.”
He is concerned that some drayage truckers will quit hauling containers and switch to long-haul as freight rates continue to soar.
“You can’t blame somebody for wanting to drive across the country as opposed to sitting at the port and getting abused all day long and spending eight to 10 hours waiting to get a load,” Peters said.
Ryan Rotan, the controller of Minturn Nut Co. in Le Grand, California, said his company shipped 2,800 containers loaded with almonds and pistachios last year, with 90% of them being export loads.
On average, he said his company is touching its files 10 times more often than normal due to all of the ocean carrier and terminal changes.
Since the peak season started in October, Rotan said his company hasn’t had a consistent shipping month.
“We’ve had two good weeks out of every four in a month that has been on a normal shipping time frame,” he told FreightWaves.
He blames the lack of communication and information sharing between the steamship lines and terminal operators with the shippers and truckers as the root cause for the delays.
“We’ve completely stopped planning around here and it’s kind of frightening because it’s just the whim of what the terminals are going to tell us, what the ports are going to tell us and then we adjust from there,” Rotan said.
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Doug Aerni
I’ve driven truck OTR for several years. Haven’t been across my state lines since 2015. I never went seaport but all my freight was import/export at every terminal between Nogales, AZ and Brownsville,TX. It was the same routine in the fact that I had to check in at the transfer terminal and oftentimes wait laden an entire day and sometimes overnight for my import to show up. Hidalgo sends tons of fruit to Del Monte outside of Denver and they have a very strict rule that if you’re not there by your appointment time your load is refused. Since almost zero freight comes out of Denver I’d usually schedule something out of North Platte, NE. Again you miss your appointment time and you lose the load. It’s happened a couple times when my inbound forced a missed appointment in Denver and I probably could’ve made the NE appointment except I’m loaded with 72,000 of watermelon or strawberries or whatever and absolutely nowhere to go with it. So after 8-10 days out I’ve actually lost money. The missed freight was either donated to homeless shelters (or as much as they wanted) or sold to livestock farmers for feed at about 80% less then Del Monte would pay. So a very lax schedule from a terminal to a strict destination or vice versa can cause a world of problems. Either way it dosen’t change the amount of travel time between destinations. It’s still gonna be 16 hours of windshield time hopefully not for free. But once you’re at the bottom of the united States border with 75,000 lbs of frozen chicken or pork ribs or something. There’s not really a whole lot you can do but hope your relay is there on time. And let’s just say Mexico has a pretty lenient policy of the condition of equipment they allow on their roads. So a mechanical breakdown on them makes a bad situation for me. So at the end of my rant I have to say you’re dammed if you do, and dammed if you don’t. So I didn’t and switched careers to operating heavy equipment and cranes because when I go to work I gotta make that money and sometimes two weeks of work left me struggling. There are many other loads to haul if the situation you’re in isn’t working out for you or other jobs waiting for the patience and skills of a professional driver.
Ted Wright
All these companies & drivers need to get on the same page and tell C.A.R.B and CA to pound sand. Shut the trucks off and let the folks starve. You want your stuff go get it yourself.
JARED L SCHULTZ
The problem is also they knew this change was coming and they put off buying a truck last minute when they saw, supply chain issue with everything else instead of doing it earlier when they could have saved dramatically