Originally Posted By: TiredTrucker
Transportation costs are a major player. I posted this elsewhere, but here goes....
I run a trucking operation. In a nutshell, if you want me to haul a load for you, at the same price or lower than i did it for just 6 months ago, I will not show up at your dock. You want the service, you have to ante up. Fuel and oil prices have very little if anything to do with how much you are going to pay to move product.
In this last economic downturn, the trucking sector lost a considerable amount of capacity. In one quarter alone, 80,000 trucks got taken out of the pool in the U.S. And government regulatory nonsense really made matters worse, and sped up the process of capacity downturn. And the existing pool of qualified drivers is lowest it has been in several years. Now the economy starts to get moving, more freight needs moved, there are fewer trucks and drivers to do it, and you have a situation where trucks are going to be allocated to the best customers who are paying the best rates.
And you can't just add on more trucks. Well you could, but they are going to sit. There just isn't a pool of qualified drivers to put in them. Government regulations have caused extreme tightening of the driver pool in both the regulatory requirements and the lack of desire of drivers to put up with the government nonsense and therefore bail out of the field. So, the ones who do stay and are qualified, the companies are having to fight each other over who gets them. Pay and benefits have to increase to attract the drivers. Again, you just can't add people. Government regulatory requirements, the desire of folks to put up with it, and the hassle by insurance companies and lawyers makes it extremely difficult to even attract people to do the job, let alone even get them in the seat. Many folks would throw a fit over the regulatory anal exam drivers have to go thru, with the constant hovering of government threatening your livelihood any given day. And taxation costs are such that a typical over the road truck pays more in just taxes and fees across the board alone than the average person in America earns in income.
Equipment costs are drastically more higher, due to the massive environmental regulations on heavy diesel engines in the last 8 years. It has magnified the cost in both acquisition and operation, and plays havoc on the net weight a truck can haul. Maintenance and downtime has increased significantly. So even less available capacity on a given day.
A lot of stuff moves by rail, but a truck has to get it from the rail yard to where ever it is needed. You can't just pull up a CSX box car to the back of a Walmart. Rail is already nearing capacity itself. There just isn't an unlimited amount of rail cars to throw stuff on. Again, the highest bidder and best customer gets the space on the train. Air freight, over 80% of air freight actually moves, hub to hub, by truck, and not on a plane.
Virtually all of this has been government inspired. Of almost every negative situation in transportation now can be laid at the doorstep of a government agency. But, keep in mind, your government cares for you! Keep that in mind as you break out your wallet and pay for your goods and services.
I have worked in the Federal, State, and local transportation realm. The "Doc" part is in Transportation and fuel economy... with CDLs in the family. The folks working with the government DO care. And when you open your wallet, keep in mind that you get what you pay for... and that "Government" dysfunction is all about you who you send to represent yourself. In DC we had a saying, it would be a wonderful town if the rest of the country did not send us 535 village idiots.
Unfortunately, (or fortunately) Public infrastructure for transport is what "works". XX% folks are fine but it is those bad bushels of apples that cause issues. Either by ignoring safety concerns for profit or ignorance, there are steep regulations protecting the public from negligent drivers (and my college friend lost his mother from a truck driver that was on the road way to long). Actually, ask a class of civil transportation engineers if they lost someone dear to them in a highway fatality, and you would be surprised how many raise their hand. As for pollution, talk to someone in a city... or worse, a mountain-valley city. All of a sudden, those regulations make sense. It becomes a tragedy of the commons. You can't have millions of VMT happening in a area without issue. (Actually, we should talk about how non-US trucks skirt emissions regs). It is not like the trucking industry ensure that all fuel tax (which is unbelievably cheap) goes into the highways (it does for diesel). Still, we are reaching capacity of our interstate system. The long-haul freight trucking system is already starting to reach the upper realistic limit for many corridors across the country. Unfortunately, if you want to fix that, you need the "government" because private efforts can't solve large-systems capacity items. Until about 5-7 years ago, it used to be that regardless of politics, transportation was funded and supported by any and all sides of the political isle. Now, it is just another political football. So if Fed 19/25 cents is too much... well, maybe it should rethink how we build roads. Honestly, it should stay around 25%the cost per gallon (the original tax passed). So $2/g cost $0.50 extra and $4/g cost $1.
You can't pull up a box-car to a walmart because WE changed the transportation network. It used to actually be that way. Also that way at ports before RR. The US subsidized highway development through a fuel tax... and it was successful. You want silly. Explain why you would take cargo from the ship, truck it 5 miles through a neighborhood to rail depot? Rather, the solution would be to build the rail to the ship. It is common efficiency here.
FYI, transportation is a major factor in cost. It is a lot more expensive to transport bottles. This is why drink companies have many different bottling plants rather than just one. Any "weight added" product incurs this cost.