Trucking industry sees trouble on the horizon - East Valley Tribune: Business

Trucking industry sees trouble on the horizon

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Posted: Sunday, April 18, 2004 5:38 am | Updated: 5:36 pm, Thu Oct 6, 2011.

A huge increase expected in commercial trucking over the next two decades threatens to jam up more highways and cause disruptions in the supply chains that U.S. businesses rely on to send goods to customers on time, several national studies suggest.

While the trucking industry welcomes the growth, it faces a challenging future thanks to an antiquated road system and phenomenal population growth in western urban areas like the East Valley. The number of trucks on highways is expected to increase substantially if the demand for freight transportation doubles over the next 20 years, as expected by many forecasters.

"More than 25,000 miles of highway will carry more than 5,000 commoditycarrying trucks per day," a 2002 Federal Highway Administration study says. "Approximately one-fifth of that mileage will be significantly congested. The congestion is particularly onerous for freight companies and manufacturers who depend on the efficient shipment of materials and finished products. Congestion represents a hidden tax to these firms, which value speed and reliability."

Local haulers say many of the state’s highways are already at capacity and metro areas like the Valley and Tucson are becoming more difficult to drive in as the amount of commuters increase. In the end, they say, a clogged transportation system will ultimately mean higher shipping costs.

"It’s definitely an issue," said Dave Berry, vice president of Phoenix-based Swift Transportation, a firm that operates 18,000 trucks from 35 terminals, according to Hoovers Online. "The more congested it gets, the more accidents you have. It impacts the time it takes to get from A to B, and time is money, so that impacts the price consumers ultimately pay for the goods to be transported."

In the south East Valley, the Santan Freeway section of Lop 202 will help move freight once it’s finished in 2006, but massive retail developments planned at Val Vista Drive and office and industrial space slated to go in at Chandler and Williams Gateway airports suggest the going will be slow as the area booms economically.

The trucking industry will continue to dominate domestic freight transportation modes, increasing to more than 68 percent its share of all freight tonnage moved throughout the U.S. by 2008, according to American Trucking Associations’ recentlyreleased U.S. Freight Transportation Forecast to 2014.

The study projects rail will move more than 13 percent of domestic tonnage (primarily bulk freight) five years from now and the volume of freight carried by rail intermodal (shared container/truck movements) will be more than 1 percent. Pipelines will transport more 9 percent of freight volume, water passage will move nearly 8 percent, and air deliveries will carry less than 1 percent of total tonnage.

A study done by the Road Information Program, a group that includes transportation industry stalwarts like labor unions, equipment manufacturers and aggregate companies, found commercial trucking is expected to increase 49 percent by 2020. Travel of large trucks increased 102 percent between 1998 and 2002, but the total number or lanes added on U.S. roads increased by only 4 percent during the same time, the study notes.

PUSH vs. PULL

The increased congestion comes at time when companies are moving to a business model that is increasingly reliant on fast freight movement, said Frank Moretti, Road Information Program research director.

"It used to be pretty much bulk commodities and if they got there Tuesday or Wednesday, as long as they got there, they were OK," he said. "That was sort of a ‘push-style economy.’ You made stuff and shipped it out to warehouses and eventually somebody would buy it. Then, you brought in the raw materials and they sat in the warehouse until you needed them."

Businesses have changed their logistics to match a "pullstyle" economy.

"You don’t want your commodities coming in until you absolutely need them because you don’t want to warehouse them," Moretti said. "And then the customer oftentimes want a product designed specifically for what they want, and so you’re having to move much smaller amounts of product but in a much more reliable time table.

The impact congestion will have on Valley businesses depends on how the area continues to grow, said Arnold Maltz, a professor of supply chain management at Arizona State University.

"If we’re going to grow on the manufacturing side, then you’re definitely going to have issues that come up with this thing," he said. "If we continue to grow by doing things like what’s happening on the west side right now, which is an awful lot of big warehouses out there, then the question is whether those warehouses . . . are going to be able to locate where the newer construction is going in. As long as those guys stay out of the center of the city and we build bypasses around the city, I don’t think they’re going to get hit too bad because increasingly things are coming of the ports as we become more service-oriented and we become basically a retail service kind of economy."

Should manufacturing increase, then its more likely plants will locate in inner cities, causing additional choke points, Maltz said.

"If they get located kind of in the middle of things, which I guess is not the likely because of the cost of land, then, of course, they’re going to cause more congestion," he said. "The question is what kind of location decisions are people going to make."

An increase in commerce between Arizona and Mexico could make freight movement more difficult locally, as could a plan to use railroad around Tucson to off-load more goods from Mexico and the Southwest and transfer them by truck.

In 2001, 86 million tons, or nearly 91 percent of all manufactured freight was transported into and out of Arizona by truck, according to the American Transportation Research Institute.

The National Interstate 10 Freight Corridor Study says truck movement along the freeway is expected to double by 2025. The study said an additional lane is needed in each direction. In the next five years, state highway officials plan to add a third lane between Loop 202 and Riggs Road and for 40 miles between Picacho Peak and Tucson in the next five years.

While one study suggests freight markets will selfcorrect and users will adjust to accommodate or avoid congestion, it says increased traffic could restrain growth in some urban areas.

"Some production will move from the United States to other countries if congestion costs more cause the United States to lose comparative advantage in some industries," according to the The Transportation Research Board, a division of the National Research Council, which serves as an independent adviser to the federal government and others on scientific and technical questions of national importance.

HAULERS ADJUST

Some local haulers have already made changes to handle bottlenecks.

"We do all of our pick-ups in the morning and do all of deliveries at night and that really helps with the situation in the Valley for a lot of reasons," said Bob Kollada, Bashas’ director of transportation. "It gives you a better traffic pattern to deal with and it makes it easier for the drivers to deliver in the evening in the cooler part of the day. It’s easier on equipment and people."

To deal with congestion, the company uses shorter trailers in areas with traffic and it blends loads to cut back on the number of hauls it makes, Kollada said, adding the company’s distribution center in Chandler serves 144 stores with 90 tractors and 500 trailers.

A spokesman for the American Trucking Association said more attention needs to be paid to highway design and congestion relief measures to ensure the transportation system is big enough and in a good enough shape to move freight. Transportation funding being considered in Congress is enough "if it’s spent in the right place and that’s on highways," Mike Russell said.

"It’s not just the trucking industry, it’s jobs, it’s whole communities, it’s grocery store shelves, it’s sporting goods," he said. "Literally everything we use moves on a truck at one time or another so that needs to be given consideration when it comes to highway planning."

PRICE TAG

The U.S Department of Transportation estimates it will take $375 billion over the next six years for highway and transit improvements.

The Senate passed a bill that would spend $318 billion, and the House recently approved legislation that would spend $275 billion. The Bush administration says $256 billion is enough to meet the need.

While politicians try to reach a compromise, the current transportation program was extended in October 2003 and will need be extended again at the end of April if no decision is reached. The uncertainty is making state and local governments nervous about going ahead with needed highway projects, Moretti said.

Besides building more highways and improving bottlenecks, there are other ideas to keep trucks moving including better coordinated traffic signals, ramp meters and even truck only toll lanes.

Russell said the lanes are worth considering.

"We haven’t seen one that is the silver bullet answer," he said.

Berry says the verdict is still out on whether the lanes would work and they are likely to anger other drivers who can’t use them.

"Trucks pay their way, he said, "There’s study after study that shows the fees that trucks pay by and large is enough to build and maintain the system of roads that they need. But what happens is you get these user fees siphoned off for other things."

An idea to allow trucks to carry more weight so there are fewer on the road has met with opposition from safety advocates, Berry said. Smart systems like meters and signs will improve the situation, but not solve it, he said.

"The answer is you’ve just got to build your way out of it," Berry said.

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