June 2010
Shipping Shortage? By Everett Brazil III, Contributing Writer

River closure could impact truck traffic

Barge traffic along the Columbia-Snake River System is scheduled for a temporary closure at the end of 2010 for repair of locks that will maintain the long-term reliability of the river system, leaving short-term impacts on cargo transportation throughout the Northwest.

The Portland, Ore. and Walla Walla, Wash. districts of the Army Corps of Engineers are implementing a long-term plan for major maintenance of the lock system, and the stimulus package provided enough funds for three projects to be tackled during lock closure,” said Kristin Meira, government relations director for the Pacific Northwest Waterways Association, Portland.

“This is good news for the long-term reliability of the system, said Meira.”

The navigation locks at The Dalles, John Day and Lower Monumental dams will close December 10, 2010 for major repairs, closing the dams for 14, 14, and 13 weeks respectively. Maintenance outages at McNary, Lower Granite, Ice Harbor Dam, Bonneville, Little Goose and Lower Monumental will be undertaken during this time.

The locks will be closed from Dec. 10, 2010 to March 18, 2011, and barge traffic from the Dallles Dam to Lewiston, Ida. will be impossible, though traffic below the dam will still be passable.

Ten million tons of cargo, worth an estimated $2 billion, moves through the system annually, much of it agricultural products. Potato growers will feel less of an impact, because most of the crop is trucked to the Port of Seattle, although they will see increased competition for trucks. Rail companies will be increasing cars to compensate, but the cargo space will be shared by everyone affected by the closure, potentially creating problems.

“A lot of wheat has to go by truck, so it’s going to make it tough to find trucks if the trucks are tied-up taking wheat to market,” said Chris Voight, executive director of the Washington Potato Commission.

“This is going to be more of a problem for packing sheds and processors. They’re the ones who have to be a little nervous, because they’re the ones who have to compete with the wheat industry.”

Growers across the United States are finding it increasingly difficult to find trucks to move their product. L&M Transportation Services (LMTS) in Raleigh, N.C., has seen a big loss of trucking opportunities for the past several years.

“The truck shortage is a lot more acute these days than past years. A lot of truck companies went out of business when fuel prices spiked and the economy went south, so now it’s getting difficult to find a truck to ship produce, when a few years ago it wouldn’t have been a problem,” said Rock Woodlief, potato and onion transportation manager for LMTS.

Higher fuel prices have had drastic impacts on the availability of trucks, but they aren’t the only problem. The economy has forced many more companies out of business, creating a shortage that must be shared by many produce companies. Woodlief doesn’t expect it to get better, either.

“As the year goes on, there will be more shipments of produce, potatoes in general, and we’re having a shortage of trucks where we never had a shortage before, so we see it as a sure sign that it’ll get worse as the year goes on,” Woodlief said.

LMTS is working to ensure they have enough contracts to move produce, and one method is through networking with their current carriers to find new carriers, but they are also working to satisfy the needs of their current carriers to help them remain interested in carrying LMTS’s cargo. Even in a bad market, customer service goes a long way to ensuring the company’s needs are met.

The truck shortage has actually had many benefits for the rail industry, as they have been able to pick up at least part of the slack left by the trucks.

“People are looking for alternative methods of transportation, and they look to rail in a higher-diesel market,” said Paul Esposito, sr. vice president for Railex, a Riverhead, N.Y.-based rail company that moves cargo across the United States. They move 6,000 car loads of agricultural products annually, 25 percent of which is potatoes, in a controlled operation, allowing them to control distribution through the entire move.

When diesel prices originally spiked, rail companies did experience problems, but those problems have mostly dissipated.

“Freight rates collapsed, so there wasn’t a differential rate between trucks and rail, but rail Is now on an upswing,” he said.

Rail has many benefits that have helped companies service customers where truck companies are failing. One is that they can move more cargo than trucks. One rail car can carry 100 tons, while a single truck moves 29 tons. Trains can also move cargo as fast as trucks, carrying cargo across the United States in a matter of days.

If diesel prices remain high, that could be a benefit to the rail industry with more companies turning to rail for transportation over trucks.

“I think there is a huge push in the produce industry to make a push to rail, either in a controlled option, or a conventional or intermodal option, but rail is definitely on the uptick,” Esposito said.

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