79.2 F
San Diego
Thursday, Sep 29, 2022

Small Trucking Cos. Face A Rough Road in State

Gabriel Zavalza Jr. sees prospects dimming for small, independent trucking companies in California during the next 12 years.

This comes despite a new national forecast that says freight haulers will move more cargo around the United States during that period and that trucks will gain slightly more market share of freight movements.

To hear Zavalza talk, such national predictions bump up against the realities of operating in California. The next dozen years could see the big players get bigger, said Zavalza, the operations manager with family run Zavalza Trucking Co. Inc. in Otay Mesa.

“I think smaller companies are going to vanish,” he said, as they encounter an environment too hard to compete in.

- Advertisement -

Asked whether his company might grow in the years between 2014 and 2025, Zavalza said the answer was yes and no.

In recent years, he said, California emissions requirements prompted the industry to buy new trucks. He said he is also facing state requirements to put aerodynamic “skirts” on dry-van trailers (additions which cost $20,000 to $25,000) and install low rolling resistance tires.

Expenses and diesel prices are rising, freight rates remain at mid-1970s levels, and there is “not a lot of margin” work with, he said.

The 30-year-old company operates a fleet of 21 tractors pulling both dry-van and flatbed trailers. The business typically hauls freight between the U.S.-Mexico border and the Sacramento-San Francisco Bay region. Typical flatbed loads are lumber, whirlpool-type spas and wooden furniture.

The new forecast from the American Trucking Associations predicts that overall freight tonnage will grow 23.5 percent from 2013 to 2025. The study — a collaboration between the trucking trade groups and the research firm IHS Global Insight — also says freight revenue will increase 72 percent.

The ATA’s U.S. Freight Transportation Forecast assumes gross domestic product will grow 2.9 percent annually between 2014 and 2019, and then 2.4 percent in 2020-25. Domestic business will be a primary driver of freight with foreign trade coming in second, the forecast said. San Diego, with its heavy share of international border traffic, may not be the textbook example of the ATA forecast.

The ATA study said that in many ways, the next 12 years will be a buyers’ market. Shippers will continue to want service that is low-cost, high quality, flexible and problem-free, the study said. “The freight transport services landscape will continue to evolve and become more complex and competitive,” the study said.

The study predicts that trucking’s share of overall freight tonnage will grow from 69.1 percent in 2013 to 71.4 percent in 2025. Rail will continue to dominate on longer hauls and with larger amounts of freight, particularly bulk freight such as coal and oil.

The forecast could easily change with world events. A territorial conflict involving China, a deteriorating situation in the Middle East, an oil supply crisis or a major natural disaster could disrupt the forecast, the group said.

Trucking is a “rough industry,” said Zavala, a 2006 graduate of San Diego State University. Some seasons are busy. Some seasons are slow.

“It’s a roller coaster,” he said.


Featured Articles


Related Articles