By Jinman Li

Special to Farm World

EVANSTON, Ill. — Illinois farmers expect increased trucking costs for this harvest season, driven by diesel fuel prices, a nationwide truck driver shortage, rising equipment costs and the newly implemented rule for electronic logging devices (ELD).

The average trucking rates – the rate per mile for hiring a truck – for grain hauling in the North-Central region of the United States, which includes Illinois, surged 24, 25 and 30 percent, respectively, for distances of 25, 100 and 200 miles during the first quarter, compared with the same quarter last year, according to data from the USDA. The percentage changes are much higher than the increases in the national average, which are 16, 15 and 21 percent for these distances compared with the same quarter last year.

Gingerich Farms and Trucking, a farming and transportation company in Lovington, Ill., raised its trucking rates 10-15 percent the first quarter this year, said Darrel Gingerich, president and operations manager. It also raised the wages for its truck drivers 28 percent in the same quarter. The company currently has 23 full-time and one to two part-time drivers, and it had difficulties trying to hire more, he said.

Aging drivers are a major reason for the shortage, because as older drivers retire a gap emerges between the drivers available in the market and the demand, Gingerich explained. The American Transportation Research Institute (ATRI), in fact, ranked the driver shortage as the top industry concern of the year in its top industry issues report published in October, based on its survey that generated more than 1,500 responses across North America.

Although the driver shortage has been a perennial top industry issue, it ranked as the top concern for the first time since 2006, according to the report. ATRI is a research organization headquartered in Arlington, Va., which conducts nationwide transportation research with an emphasis on the trucking industry.

“The driver shortage is getting more severe, and it’s going to get worse in the next several years. Younger people aren't getting into truck driving anywhere near the same rates that older generations did,” said Eric Gallien, associate director of the Illinois Trucking Assoc., a trade association that includes more than 700 trucking companies across Illinois.

Younger people who choose to join the workforce instead of going to college may be reluctant to go into the trucking industry because federal law prohibits them from driving on interstates until they are 21 and lowers their chance of being hired by trucking companies, Gallien said. The age limit drives away those who want to solidify themselves in a profession at a young age, he added.

Meanwhile, the Baby Boomer generation that makes up the bulk of truck drivers is approaching retirement age. An ATRI study in 2014 found that 55.5 percent of the workforce in the trucking industry was 45 or older, while less than 5 percent was in the 20- to 24-year-old age bracket.

The implementation of the ELD mandate aggravated the situation because a number of older drivers don’t want to have their driving hours electronically monitored and automatically logged to a tracking system – and so they opted to retire, Gallien said. The mandate required all commercial motor vehicles to have installed ELDs by Dec. 18, 2017, and the devices track drivers’ total hours and miles driving for each day, he said.

“Before the ELD, trucking companies would have to keep a logbook and you can only drive 11 hours out of the day, but it was kept by paper logs, so you could write realistically whatever you want in there,” Gallien noted.

Apart from the increased drivers’ pay, insurance rates and equipment costs are also going up, Gingerich said. Costs for leasing a truck and trailer increased 2016 compared with the prior year, while repair and maintenance fees increased 7 percent and truck insurance premiums increased 1 percent during that period, according to the 2017 Operational Costs of Trucking Survey published by ATRI in October.

Trucking costs are an important issue for Illinois, a state with vast rural areas for which trucking serves as a major mode of agriculture transportation, said Don Schaefer, executive vice president at the Mid-West Truckers Assoc., which has more than 3,700 companies operating trucks from 15 Midwest states as members.

As of February 2017, Illinois farmland covered about 75 percent of the state’s total land area, according to USDA. Corn accounts for 54 percent of the total annual marketing of Illinois’ agricultural commodities and soybeans contribute 27 percent, according to Illinois Department of Agriculture.

Nationally, for both corn and soybeans, trucking is the most common mode of transportation, accounting for 71 and 54 percent of the total tonnages, respectively, according to 2014 data from USDA.

Compared with farmers who hire trucks for grain hauling, farmers who use their own trucks may be less impacted by the driver shortage and the increased equipment costs because they usually hire friends or families as drivers. Too, they tend to have a slower pace of equipment renewal than trucking companies, said Scott J. Sigman, transportation and export infrastructure lead at the Illinois Soybean Assoc.

The farmers who own trucks, however, are also subject to the influence of the diesel price, which is a proxy for trucking costs as it accounts for a significant expense for truck transportation, said Sigman.

Wentworth Family Farms, which primarily plants soybeans and corn in central Illinois, owns two trucks and hires one extra truck every fall for harvesting. Dennis Wentworth, the owner, said he’s seen diesel prices going up in the past two months.

The weekly retail gasoline and diesel prices in the Midwest as of June 4 is $2.902 per gallon, compared with $2.796 on May 7 and $2.414 on June 5, 2017, according to data compiled by the Energy Information Administration.

“Fifty cents a gallon increase translates into (a) tenth (of a) cent per bushel. It's not that big of a factor when you break it down into per-bushel. It’s a minor influence,” Wentworth said. “But when you fill the truck up and you put in 200 gallons of fuel, that's $100 extra that you put in the tank. It does add up.”

Wentworth Farms transports about 700,000 bushels of soybeans and corn during the harvest season each year, which is about 1,000 truckloads, he added.