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The US north-east ports remain crucial to RoadOne IntermodaLogistics, the region’s largest intermodal truck operator, but the pattern of trade is shiſting slightly, says CEO Ken Kellaway. A combination of problems at the major gateway of New York/New Jersey - “a perfect storm of labour shortages and bedding in new technology” - has prompted some shippers to look at alternatives such as Baltimore or Boston. Shippers have avoided putting

all their eggs in one basket, and some have switched significant amounts of business to the smaller ports. “People are at least looking at the options.” RoadOne, as a major drayage

operator, has a presence in all the US East Coast ports, as well as the major railheads. However, switching traffic from one port to another isn’t always easy, if only because “most drivers are domiciled in a local market and if the business moves, we then have to recruit drivers there. We do what we can to make it work, but it can still cost us time and money,” Kellaway states. Another big change that the

drayage operators have had to cope with has been the shipping lines’ decision to get out of chassis operation and to sell off the business to ‘pool’ operators. For companies like RoadOne, that mainly provide ‘drop and hook’ services, moving other peoples’ chassis causes a lot of stress, because they now have to go to off-dock chassis parks and “the quality of equipment is not always what it used to be.” Unfortunately, there isn’t a single neutral chassis pool and the whole system has become a lot more complex than previously. At the same time, the increase

in ship size is putting further strains on the available chassis fleets.

“The problem is that

people think drayage capacity is somehow infinite, but it isn’t,” points out Kellaway. One constraint on trucking

capacity are drivers’ hours limits. New Federal Government rules restrict the total number of hours a drive to 11 in any 24 and the total number of hours worked (including non-driving activities) to no more than 14. Port delays can eat into this time and, by the time the driver has negotiated a six-hour queue to pick up a chassis and container (not unknown at the height of the recent port congestion problems)

they will not get very far in the remaining hours available. The exact amount of time spent

queuing at terminals is a bone of contention in the industry; terminal operators quote the time taken from arriving at the terminal gate to leaving again, but that doesn’t take into account the time spent in the queue to get to the terminal in the first place. The driver shortage is also a

big issue for all US road operators, and in particular the drayage sector. This, says Kellaway, could be “the significant game-changer” in the industry. With an average driver age of 55 years – which is also increasing rapidly – there are very few young drivers coming into the industry. Those that do are oſten attracted to the arguably easier life in the e-commerce delivery sector or local delivery rather than the long hours and lower rates that have been prevalent in the drayage business. Other factors are restricting the

number of young drivers coming into the industry, adds Kellaway. “Qualification standards are becoming increasingly complex due to insurance requirements and government regulation.” Only 35 out of 100 potential candidates ever make it through RoadOne’s initial screening process. The other problem is that most companies’ insurance require drivers to have a minimum of ‘1-2 years’ truck driving experience before they are willing to insure them, which creates a ‘chicken and egg’ situation – without the experience, young drivers can’t get work but without the work, they don’t get the experience. Drayage firms like RoadOne of independent

use a lot

subcontractors, and these firms are finding it increasingly hard to raise the capital to buy new trucks, especially when ever- tougher environmental rules are pushing up purchase prices. “So it really is incumbent upon us to improve rates and increase efficiency,” says Kellaway. RoadOne has started an

agency-based division through its US IntermodaLogistics arm, through which it aims to foster trucking entrepreneurs. USIL helps those interested in owning a drayage company to launch and manage their business. Negotiations to push up rates

are a long process, conducted on a trade lane by trade lane basis, but they are slowly bearing fruit, he believes. These increases,

Issue 6 2014 - Freight Business Journal

Box truckers under pressure as driver shortage starts to bite

speed and efficiency of the railroads’ intermodal service has increased markedly, says Kellaway and he finds that his company’s railhead haulage is growing much faster than haulage to and from the seaports. Some ports and municipalities

Kellaway states, are critical to the long term sustainability and viability of the drayage sector.

The other effect of the squeeze

on trucking is that it is driving more traffic onto the rails. The

are tightening up on the emissions levels of trucks passing through their gates. The West Coast ports have led the way on


this, but now the East Coast ports are beginning to follow suit. Some truckers have experimented with liquefied natural gas (LNG) trucks, but Kellaway considers that the technology is not yet up to the job of moving a heavy loaded container; the capital cost of LNG trucks is also very high and there can be issues with refuelling and ongoing maintenance.

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