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 it would be shutting down, placing 30 employees in 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 stretching 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 by 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-heavy state like California, have also been way up in the past three years. Since February 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 February 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 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: “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. It has a large agriculture industry, a sizable industrial sector and the biggest port in North America, and a third of all jobs in the state are in logistics-dependent industries. Trucking is still the largest logistics mode by far.
While it is too late for Starlite 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 its doors last week.
Les Lindsey
If the government would just leave the industry alone we wouldn’t be having so many companies shutting down. Leave it to the people of politics that no nothing about the industry adding more and more rules and regulations. It needs to stop. They are screwing with a lot of lively hoods. Why mess that up for the trucking industry, the drivers, and there families.
stu
it’s all about creating high paid positions in government bureaucracies.
Luke
Stu, I don’t mind they do it. Obama, when economy was stagnated for 8 straight years, maintained employment percentage number by multiplying the governmentS positions. I don’t care if US so rich to pay “zi government”. What I do care, it’s to create a real Small Fleets Organization, which will protect our rights. And do not let “zi government” to generate illegal and unconstitutional regulations.
Alex
When I began trucking in 2010 and saw California from the cab of my 18 wheeler, I said there needs to be large distribution centers in AZ, NV, and OR so non-CA carriers don’t have to enter the state. That way the CA carriers can get all the work back and forth from those centers. It saddens me to see another company close its doors. That makes around 6 or 7 (?) companies to close since NEMF declared themselves bankrupt.
Jimmy Wells
Maybe Oregon’s ports should start taking in freight and leave California to drown.
Curt Redding
I have worked for 2 trucking companies that went out of business and always said there is hardly a way for small companies to make it nowdays with the maintenance it takes for the Particulate Deisel Filters require
Luke
Curt Redding, then a question: How it is legal or constitutional for the Government to came up with the same set of requirements and regulations for the mega carriers, which operate on the lower cost or for free AND for a small fleets which are bleeding to death and bankruptcy?
Jim Woods
A solution is to move trucking industry completely out of CA. Don’t even bother deliver anything there. Where is Black Smoke Matters at on this.
Luke
Jim Woods, why you are not considering to create a small a Small Trucks Fleet Union (say 1 to 30 trucks) which would include about 1 million or more drivers and fight for our rights. OOIDA proved to be a joke.
Frank Hammond
Can’t do it – Millions of square feet of warehouse space built in Ontario – Chino – Inland Empire. More millions being built. Makes no sense, but more companies are building in So Cal than moving out.
Matthew Widler
I personally believe that California needs to back the fuck off of everything that is going on in America. California is a liberal state harboring illegals and they want to no longer be part of the United states of America so they have no right to tell the rest of the country how to do or operate anything. Fuck all California laws and regulations.
Matthew wilder
How about fuck you and fuck all the raping of the environment that had been going on over the years. Fuck the trucks pounding the roads and not putting in their fair share. You are a fucking xenophobe and a racist going right to “harboring illegals” maybe you can whine to Daddy Trump and he will pretend to give a shit and lie about saving your job. You fucking snowflake.
Leon mcbride
Real sad as you have no substance in this remark. Goverment overall has over regulated everything in your great state. Let’s hope this doesn’t spread to the rest of America. Real nice observation on your part. Thank you for being so vulgar.
Adolf
Im guessing you’re a illegal piece of shit
Roberto Lilly
You forget, it’s the Truckers who are the backbone of America.
Jykelly
How many of these illegals do you pay for and actually live with you.?…. Wait until one of these perpetual drink driving illegals kill a few of your family members…
Luke
Jukelly, just curious. You blame illegals (which is bad, but illegals now maybe 0.001% of drivers, not like 20 years ago when eastern European schools provided CDLs to anybody for little pay) at the time when the Government, FMCSA counterproductive regulations crushing the industry? It’s not an illegals who create a non humane HOS rules or draconian ELD monitoring.
Joe
No but it is the illegals that’s pulling freight for under a 1.50 a mile killing the rate for everyone else
ApocalypseNow
Are we winning yet??
stu
yeah taxing us more saying they are going to fix our roads then didnt. Now if your not even a citizen and you step foot in California between the ages of 15-25 you get free health care at a cost off 44million a year.
Rotund Rider
Actually Northern California roads are in the best shape I’ve seen in a long time. Especially 101.
Jake Graywolf
Matthew you need to see a proctologist’s brain surgeon boy. Your heads to far up your butt boy.
Luke
Jake Graywolf, and this is our biggest problem.
Instead to be united under one little union to protect truck drivers small fleets (say from 1 to 30 trucks. Becouse OOIDA proved to be worthless) interests, we communicate with each other with blames, ‘f*ck you’ words or not communicate at all.
Wycked
Mathew, you stupid, hypocritical Twit! You played Devil’s advocate under the same name. Or, you’re a troll too dimwitted to procure your own name. It’s not “racist” to not agree with allowing illegals to break the law by being here without permission. Color or county of origin was never mentioned. At best (or worse) the word “prejudice” could be used, just as you are prejudiced against truckers. BTW, truckers per se don’t “rape the environment”. They don’t mine or haverst anything. They “pound the road” bringing you all those goods you can’t or don’t want to live without…and I’ll bet they pay a lot more toward taxes that repair California’s roads than you do. If anyone’s a “snowflake”, it’d be you, you Shitty Little Nitwit!
Jimmy Wells
Typical Marxist response to anyone that has an opinion different than yours. Don’t you guys ever get tired of regurgitating the same buzzwords and catch phrases? Even if you’re correct and the man is a “racist” or “xenophobe”; who cares? What if he doesn’t like the color pink or dislikes cats/dogs? Will you try to throw him in your gulags for “hate speech”?! People in America have a RIGHT to opinions and the Constitution guarantees they can voice said opinions. Don’t worry my little Red buddy…you’re going to get your war soon enough! You sir, have much growing up to do.
Rotund Rider
No, the First Amendment protects you from government retribution when you criticize the government. Period.
You voice a racist opinion to others, don’t cry when you get your head handed to you. Not a First Amendment issue. Go read your pocket Constitution.
Jimmy Wells
Show me where it states that in the Constitution. Nice try, Karl.
“Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”
Luke
Matthew, please, use your energy wisely.
Jim cook
Another man bun wearing TDS natzi snowflake!…and by the qay semi trucks pay 500%more road taxes then cars…so talk to your dumbocrat party you vote for thats ass raping you! And you allow it
Joker
Matthew you can come to Arizona to get your Fucking shit you loser. See how much of what you don’t have,signed,Mr. Snowflake
James Parkhurst
TRUMP better than any Democrat
Bob
Hahahaha you little bitch
James
Mathew are you a driver
Luke
Even if I agree with you, the California’s lawmakers here to win.
Ron turgeon
I think the Governor should be impeached and get rid of carb until they get a real plan that will work for the o/o as well as the big companies ro
Jimmy Wells
He should be tarred and feathered. If we don’t get it together these Marxists will make 1600’s Britain look like kindergarten teachers.
Charlie
Well said.
jack
Natural gas is the future of trucking, diesel operators shall perish, especially in California
Edd
To open the flood gates for outsider, probably illegal, freight carriers to abuse US DOT, and further deteriorat the highway infrastructure. They dont aid in the taxes. Only in the fuel tax. Shippers have not compensated drivers well for decades.
Charlesfaile
You can tell that by what a lot of brokers are charging to run for the mile…not much…how much can we take of all of this ? We drivers got beg to make money !!! You ask brokers to give you 50 cent more and he telling me he can’t , he dont want to get in trouble with his higher ups
, we try hard out here to try make it wirh what cost to operate …its getting to the point where its not worth the time and energy and being away from family to be out over the road driver anymore and im sure a lot of drivers out there can vouch for that !!! I’ve been over the for 20+ yrs .
Stephen
Natural gas will take over in B. C and Ontario Canada as well with our carbon tax . We need minimum freight rates and detention pay and give the truck drivers more flexibility and all companies required to pay after 8 hours driving or 10 hours on duty per day at $20.00 U. S. Or $26.50 cd per hour while in Canada or the U.S. or Canada no loads under $1.80 per mile plus $45.00 per hour dock rate U.S. 5195239586
Joe McFly
I wouldn’t work for any of those amounts you mentioned, I make between 3 and 500 a day as a company driver, sometimes more . Yesterday for example I had a busy day and I made $620 gross . But if I were an O/O I wouldn’t haul for less than 2.50 a mile, and that’s just refrigerated! Anyone hauling freight for 1.80 a mile is going under, I don’t care if you own your equipment or make payments. Because it’s parts you gotta buy or payments you gotta make!
Bill davis
It what happen when it all started back 1998 cal started push the little guy out the big guy just said nothing so now it has came full circle so sad
Jake Greywolf
What also was a pick pocketed robberies was contract scales breaking items on your new trucks. Telling you that you had to call their cousin garages to fix what they cut or broke. You had to have a certified mechanic to fix what they broke or backed off brakes. Also the states like Maryland charging $670.00 for fifty three foot trailers on I -95 . And Oregon charging extra tax on loads going into their state even if you have Oregon IFTA stickers for their state. Another thing is New Mexico charging drivers for not logging their selves out from driving on a DOT inspection $125.00 by not changing to not driving but on duty at SCALES FOR DOT INSPECTION. All the bull crap from black Texas state troopers lying about their speed detector saying they clocked a truck doing 79 mph in a 65 mph speed zone in a slow truck governed at 64 mph. You have to except the ticket because you can’t afford to pay a wrecker to toe the truck to a certified service station and pay to prove the governor was in tacked. If you proved the truck was a 64 mph truck the state doesn’t refund the driver. Texas doesn’t anyway. Yes no unity in the trucking business against crooked scales and contract scales. The larger companies are paying more for pushing owner opps out of the trucking business. They are feeling the ugly truth about reaping what they sowed. SEMPER FIDELIS
Truckerslifer
Stfu and find a new job you winey little bitch.
Gene
Another white racist flexes his pie hole on social media.
Hershey
You’re dumber than Jimmy Carter
Raeman1976
The Neanderthals didn’t make it either. Evolve or die. Drive cross country if that’s what it takes. Greed is always the motivator. The way you can tell who is greedy is by the way they dump employees instead of changing policies.
Wayne L Potts
Its sad to see.
It all boils down to plain old GREED. Govt and Big business Ruling over everything.
Cost of living going up monthly…but most companies still offering. 1980 wages.
12.00 to 13.75 an hour.
True cost of living is 24.00. To 30.00 per hour NATIONWIDE.
Natiral Gas is not.the answer…It also is a Fossil fuel.
People wake up…. We are using it up toooo fast.
We have about 150 years left…Then everything will be Gone.
The answer is SLOW down…we moving too fast.
Everything doesnt have to happen overnight.
MODERATION……BALANCE.
Doesnt mean just watch what we eat and exercise.
It applies to Every aspect of the World.
Nasa
It’s not sad these big carrier’s deserve what they get .They’ve been cut throat for the last 30 years moving freight by volume I hope they all go down not paying driver cheating them
Joe
We have a new demon th worry about guys. You can check this out with any dot approved physical doctor. Our own government no mind you our own government are letting foreign driver come he to drive on our highways. Which is fine but the catch is they do not fall under any DOT regulation. The doctor is told not to upload any discrepancies on the DOT website not to fail this person. They don’t need a CDL license. They don’t fall under mandated regulations. We are fighting with each other over skin color and ethnic backgrounds but we better band together and fight in what we love and live in or before we know it it will be taken away
Az best
Joe how in The Whole world did u come up with this bs nonsense ,, facts pls .
Where did you read this stuff so I can educate myself an maybe a few others .
I know for a fact that in the good old USA if you are driving a commercial vehicle be prepared to show your CDL in case you get stopped or pulled in a chicken coop cause if you don’t they will nail you to the wall my friend . That’s exactly what happened to me before I had my CDL . came up to the weight station in chowchilla California an got pulled in cause they wanted to inspect the truck an when they asked me for my DL I showed my regular dL lol ,, whole hell broke loose after that an five hours later I had a checkbook of tickets totaling little over $4000.00 had to pay every bit of it . Judge never gave me the time of the day to pay little less . So Joe FYI pls state facts not bullshit ok . Cause we don’t want any idiots out there thinking they can jump on a rig an just go after they read your post . SAVE LIFES NOT LIES