Meeting in Vail, Colorado, on July 14 to 16, 1999, The Refrigerated Division of the Truckload Carriers Association took a hard look at its economic future and continued to gather data on food safety guidelines in its attempt to forestall potential new government regulations.
Refrigerated carriers face a future of intensifying competition, Anthony Gallo, vice-president of Deutsche Bank Alex Brown, told them. To meet this competition, the critical issue is to focus on costs as a way to take advantage of good economic times, he said. In general, the cost of operating a refrigerated carrier is nine cents to 11 cents more per mile than the cost of operating a dry van carrier.
Martin Labbe, president of Martin Labbe Associates, said that refrigerated carriers could look forward to increased freight volume built from a wider range of products, including hauling dry freight and refrigerated products in the same trailer. He also said that the US domestic refrigerated for-hire trucking fleet is losing $548 million a year in profits to excess waiting at loading and unloading docks.
At present, no HACCP plans are required for transportation, and the industry goal should be to keep it that way, Norm Spear, a spokesman for the industry food safety task force, said.
Providing clean equipment is of utmost importance. If a trailer smells bad, it's dirty. If it looks dirty, it's dirty. If it feels gritty or oily, it's dirty, he said.
In addition to its educational program, the Refrigerated Division elected new officers. Marty Geffon of Willis Shaw Express is chairman; Richard Durst of Arctic Express is vice-chairman; and John Ameling of KAT Inc is secretary/treasurer. Charles Robertson of FFE Transportation Services is immediate past chairman. Randy Marten of Marten Transport, Ronnie Dowdy of Ronnie Dowdy Inc, Dean England of C R England, Harry Norris of Howell's Motor Freight, John Christner of John Christner Trucking, and Larry Tyson of Trailwood Transportation were elected regional vice-chairmen.
Strong Competition Points to Dicey Future Refrigerated carriers face a future of intensifying competition, Anthony P Gallo told members of the Truckload Carriers Association Refrigerated Division meeting in Vail, Colorado. While fair weather may not lie ahead, all is not lost, he said.
Gallo is vice-president of Deutsche Bank Alex Brown, a fairly recent combination of the US investment banking firm Alex Brown and Deutsche Bank, the large European commercial bank. Alex Brown has a long history of handling the stock of publicly owned transportation companies. Deutsche Bank is the largest financial institution in the world, he said.
The critical issue for transportation companies in facing increased competition is to know their costs as a way to take advantage of good economic times, Gallo said. In general, the overall domestic economy is in good shape. Interest rates are fairly stable, although the Federal Reserve has a tendency to edge those rates up to forestall inflation. Both the housing industry and the automobile industry are experiencing a boom. Technology developments are driving increased productivity in most industries, he said.
High Consumer Confidence According to most reports, consumer confidence is at an all-time high, Gallo said. Consumer spending is about two-thirds of the total economy. Currently, it is extremely strong, while not quite as high as it was in 1994. In addition, the domestic economy, particularly the industrial sector, seems to have recovered from its bout of Asian flu, he said.
Diesel fuel prices are up from their levels in recent years, but these prices can still be considered favorable compared to much higher prices in the past, Gallo said. For the past years, diesel prices have averaged about $1.10. Although diesel prices can be called favorable, they are not favorable compared to 1998. For many carriers, diesel prices are hovering just below the level at which rate surcharges can be imposed. That may not last, however, because some analysts are predicting crude oil prices to stabilize at about $20 a barrel, he said.
The Asian economic crisis of 1997 and 1998 has been a mixed blessing for the US domestic economy, Gallo said. The inability of industrial producers to sell their goods in Asia created an oversupply that drove down prices in some instances. This in turn allowed interest rates to fall and helped keep the price of imported goods low. The result was stimulation of the domestic economy in contrast to the global recession that many economists had predicted. The bad news is that low inflation made it almost impossible for industry segments such as trucking to pass on increased operating costs, he said.
"Price competitiveness in the global economy is high," Gallo said. "As a result, passing along costs becomes extremely difficult."
Market Discounts Trucking Stocks Many people in the financial field see the stock market as a discounting mechanism, Gallo said. This means that the market is an economic attempt to predict the future by setting the price for corporate shares. For the past several years, stock prices for both refrigerated and dry van transportation companies have been below the prices for other public com-panies with small market capitalization levels. Wall Street has already discounted these stock prices because it senses that the transportation industry is not truly healthy, he said.
Many publicly owned refrigerated carriers are reporting lower earnings, Gallo said. Even with higher revenue, some of these carriers are just barely breaking even. A few have actually reported quarterly losses. As recently as 1996, several refrigerated carriers, both public and private, experienced some financial success. In 1997, many of these same carriers showed weaker results, and final numbers from 1998 will show continuing weakness, he said.
The real problem for refrigerated carriers is that weak performances far outnumber strong performances, Gallo said. Carriers tend to blame poor performance on low rates, but rates are not the problem. It doesn't matter what the rate is as long as it reflects the cost of providing service, he said.
Higher Operating Costs In general, the cost of operating a refrigerated carrier is nine cents to 11 cents more per mile than the cost of operating a dry van carrier, Gallo said. Poor performance results when revenue does not reflect these additional costs.
An attempt has been made within Deutsche Bank Alex Brown to analyze the difference between dry van costs and refrigerated costs, Gallo said. In some instances, analysts found dry freight rates that were actually higher than rates for refrigerated products on lanes with the same length of haul. "This doesn't make sense because we know that the equipment required to provide refrigerated service costs more," he said.
Many shippers have both dry freight and refrigerated freight available on many lanes. "I talked to several of these shippers in preparation for this presentation," Gallo said. "I was disappointed to learn that many refrigerated carriers haul more dry freight for some shippers than refrigerated cargo, because the rates are better for dry freight."
Hidden Costs Refrigerated motor carriers operate with hidden costs that are difficult to pass on to customers, Gallo said. Among these costs are payments to lumpers for un-loading, administrative costs and lost payload as a result of pallet exchange, higher cargo liability costs, increased costs for drivers including wages plus recruiting and retention programs, fuel for refrigeration units, higher trailer maintenance costs, and poor tractor productivity.
Profitability can be attributed directly to productivity, Gallo said. The carriers that make money have improved their productivity by placing more of their assets on the road rather than in their offices. Among dry van carriers, the ratio of tractors to the nondriver workforce has held fairly steady for the past few years at about six tractors for every nondriver employee. Refrigerated carriers do fairly well at this with about 6.2 tractors for every nondriver.
However, refrigerated carriers have lower productivity when it comes to their trailer-to-tractor ratio, Gallo said. Dry van carriers are able to increase their driver and tractor productivity by using trailers in drop-and-hook operations that do not require the tractor to remain out of service while a trailer is being loaded or unloaded. Dry van carriers have two or more trailers for every tractor, while refrigerated carriers operate only 1.4 trailers for every tractor. "Raising the trailer-to-tractor ratio is not as easy to accomplish in the refrigerated business, but I do think that progress toward more tractor productivity should be made," he said.
Low Barrier to Entry Refrigerated carriers face a number of problems with regard to profitability. For instance, the barrier to entry for new refrigerated carriers is low. This poses a problem because the harder it is to enter an industry, the better conditions usually are for the established companies, Gallo said. Barriers to entry in the dry van business actually are increasing. This is especially true with the larger shippers. They want the newest high-cube equipment available as well as shipment tracking and other high-tech services. In general, dry freight shippers want to work with carriers large enough to serve their needs. Small carriers simply cannot provide the capacity or service to compete.
New entrants face few barriers if they choose refrigerated trucking, Gallo said. Hauling refrigerated freight is one of the easier segments of the trucking industry to enter. Requirements from shippers have not been as complex for refrigerated freight as they are for many dry freight shippers.
Another problem is the bargaining power of the service purchasers, Gallo said. If the purchaser holds all or most of the cards in any negotiation, profitability is at risk. This is especially true when the purchaser can substitute one mode of transportation for another-for instance, rail intermodal instead of team drivers on the highway. The good news for refrigerated carriers is that intermodal service still does not seem to work as well as trucks, he said.
The same argument holds true for equipment suppliers, Gallo said. If suppliers possess most of the power to set prices, carriers have more difficulty generating a profit. However, the dry van segment of transportation contains some fairly substantial carriers such as Schneider, Werner, Heartland, and others. If nothing else, these large carriers can employ their size to negotiate better prices for tractors and trailers than their smaller competitors. Fewer economies of scale are available to refrigerated carriers, simply because the industry does not have any carriers as large as the larger dry van carriers, he said.
Big is Better Size provides an advantage to dry van carriers in other ways. When a carrier is large enough, it has a better chance of finding backhaul freight because it has enough capacity to offer service to a wide range of customers, Gallo said. In contrast, refrigerated carriers have difficulty finding perishable freight to fill all their traffic lanes. When refrigerated freight is not available or when carriers do not have the capacity to handle what is available, carriers are left to compete with the large dry van carriers.
The balance of power in rate negotiations for dry van carriers still resides with the shipper, Gallo said. However, customers are more open to the concept of partnerships and are willing to discuss operational changes that result in improved productivity for the carrier. This is not the case for refrigerated carriers. Shippers are less likely to negotiate any concessions, probably because barriers to entry for refrigerated carriers are so low that the shipper can count on a constant supply of low-priced freight service.
These factors taken together provide a look at the competitive nature of refriger- ated trucking, Gallo said. As long as shippers are under pressure to deliver product at ever lower prices, this competition will not abate. Shippers have begun to look at distribution costs as a whole instead of simply linehaul freight costs. Inventory carrying costs and warehousing are now an important part of the total cost equation to most shippers.
Distribution is the last hiding place for costs at many shippers who have already made the changes necessary to squeeze costs out of the system in terms of manufacturing and labor, Gallo said. Shippers are willing to negotiate with carriers for changes that will result in improved productivity for both parties. However, carriers should expect to encounter continuing price sensitivity from shippers, he said.
Shippers look to third-party logistics providers to help reduce distribution costs. This has advantages and disadvantages for refrigerated carriers, Gallo said. The disadvantage is that logistics com- panies are always looking for lower rates. The advantage is that refrigerated carriers can embrace logistics companies just as though they were another shipper. Another advantage is that logistics providers seem more open to making changes to improve productivity than do some shippers.
Plenty of money is flowing through the logistics providers. By 2000, logistics companies are expected to control roughly $50 billion in freight, almost double the amount they controlled in 1994, Gallo said. One response to increased competition will be consolidation among refrigerated carriers. However, weakness at some of the larger players may prevent large scale mergers, Gallo said. In fact, some of the larger carriers may shrink as a way of tuning their balance sheets rather than expanding.
No discussion of refrigerated carrier financial health could be complete without mentioning drivers, Gallo said. Demographic trends continue to indicate a low supply of new drivers. When they can be found, drivers will want to be paid more than the industry pays today. In addition, new drivers will demand a better quality of life, both in terms of time at home and in the way they are treated while on the job.
The cost of drivers is reflected in factors other than wages, Gallo said. Refrigerated carriers, especially, must maintain a fleet of new premium tractors if they are to attract the drivers they want. A study of driver wages compared to rates since 1991 shows that rate increases have generally kept pace with rising wages, Gallo said. However, pay for driving teams far exceeds the available rates. In addition, some carriers have lost tractor productivity as they attempt to retain drivers. This cuts into the gains from rate increases. Essentially, carriers should expect to see most of their future rate increases go to drivers, and carriers should expect wages to rise faster than rates, he said.
Prepare for High Volume, More Productivity A long as the refrigerated trucking industry is not on life support, it is healthy enough to survive, Martin Labbe, president of Martin Labbe Associates, told the annual meeting of the Refrigerated Division of the Truckload Carriers Association. He said that the outlook for increased freight volume is good, but that refrigerated carriers cannot continue to operate as they have in the past.
Motor carriers that specialize in refrigerated freight operate with a lot of pressure. In the next five years, that pressure will become more intense, Labbe said. A growing economy will pour more freight volume into the business, and the pressure to perform will increase.
A shift is taking place that demands more temperature control for all freight, not just those commodities that have traditionally been refrigerated, Labbe said. At the same time, the standards for levels of service are getting higher. This can be attributed to dry van carriers that have used new technology to make their service more consistent.
Additional pressure will come with increased regulatory activity, Labbe said. Carriers can look forward to more roadside inspections and more emphasis on hours-of-service compliance enforcement.
Growing Economy In the midst of this pressure, carriers can find some good news, Labbe said. The gross domestic product for 1998 grew at 2.9% and so far through 1999, it is growing at 4.1%. For the period 1998 through 1999, growth is projected at 3.2% overall. Industrial production has grown 2.7%. Solid growth is forecast for the next four years, he said.
This growth will lead to a boom in the trucking economy. In 1998, the Class 8 tractor fleet totaled 1.8 million vehicles, Labbe said. By 2004, the Class 8 population will grow to 2.4 million, and 1.05 million of them will be less than five years old. This projection is based on economic growth models and existing traffic patterns for freight. "If we cannot improve productivity in the trucking industry, this is the number of trucks we will need on the highway to haul the nation's goods," he said. "That's a 30% increase that will cascade through the industry in terms of more drivers required and additional investment needed from fleet operators."
Scheduled Deliveries Refrigerated carriers have long dealt with scheduled deliveries. Soon, this industry will find itself needing to know exactly when a delivery will arrive, Labbe said. As shippers and receivers strive to reduce total supply chain costs, expedited shipments become more common. "We are beginning to track shipments in real time," he said. "When distribution schedules depend on inventory arrival, receivers need to know when a shipment will hit the dock-exactly when, not I think when."
Dry van carriers have been dealing with rail scheduling for several years, particularly dispatching trailers to meet trains at specific times and places. For refrigerated carriers, this interface with the rails will be most common for imported goods, Labbe said. The railroads now have a significant number of mechanically refrigerated cars for imported goods that will ultimately end up in refrigerated trailers for final delivery and subsequent distribution.
Truck size and weights will become an issue for politicians and the public. "If we have 30% more Class 8 vehicles and at least 25% more Class 3 through Class 7 vehicles on the road, we'll have to find someplace to put them," Labbe said. "If we can't improve productivity, we'll have to find a way to deal with additional traffic. This increased commercial traffic will happen at the same time as a boom in the auto industry. We face more cars as well as more trucks on the roads. As commerce flows from the NAFTA agreement, we will begin to see the US used as a land bridge between Mexico and Canada. Trucking will move that freight rather than railroads."
Technology for trucking will soon fall into two categories-on-board systems and information management systems. "With on-board technology, we can already do an oil analysis as the vehicle travels down the road," Labbe said. "We can record vehicle activity. We can communicate with the driver and issue instructions. With management systems, we can locate the vehicle, and we can tell whether or not a door has been opened or closed. This technology will help carriers with maintenance management as well as scheduling and lane balancing."
At present, technology seems to be supplier driven, Labbe said. Carriers will adopt new technology, but they have no idea how long it will take to pay for it. Payback should be a reasonable decision. If a carrier does not know how long a given technology requires for payback, it cannot determine a value for that technology, he said.
Greater Demand for Perishables Just like the general freight dry van carriers, refrigerated carriers can look forward to a future with more freight. The public will consume more fresh fruit and vegetables, Labbe said. Manufacturers are producing more food that requires temperature control. In addition, the US is beginning to source its food from other countries. This additional transportation will require refrigeration. Projections call for general transportation requirements to grow 2.5% while refrigerated transportation will grow by 3%, he said.
One way to meet this increased demand is to put more vehicles on the road. In general, this is the approach taken in the US for the past 15 to 20 years, Labbe said. The other approach is to improve productivity so that the same number of trucks can handle more freight.
Increased productivity is the best answer, Labbe said. If carriers could institute drop-and-hook operations, they could improve tractor utilization significantly. Consider the saving available if a carrier could get a tractor back under load within an hour compared to the eight hours that is presently common.
High Demand for Drivers Increased productivity requires the ability to use each piece of equipment more hours every day, Labbe said. This can be done by utilizing teams of drivers for longhaul lanes or by slipseating drivers in shorthaul operations. While both strategies will allow carriers to use tractors for 20 to 24 hours a day compared to only 10 hours for a solo driver, teams and slipseating will require more drivers.
Carriers will have to recruit and pay this additional driver pool, Labbe said. Those drivers will demand more pay than drivers today. The only way to offset the costs will be with equipment productivity.
The industry must maximize the number of hours its employees are actually driving, Labbe said. That means fewer hours of waiting between loads and less time spent at shipper and receiver docks for loading and unloading.
Regardless of the method used to meet increased freight demand, the future will require substantially more investment capital from trucking companies, Labbe said. A 30% increase in tractors will require an even larger increase in the number of trailers. Purchasing this equipment will increase the debt service that most carriers have to pay.
Changing Distribution Patterns The food industry will meet increased demand by building more, but smaller, distribution centers, Labbe said. As people move away from the central cities, distribution will have to follow.
Shippers and receivers are already looking for ways to reduce distribution costs. One of the most successful methods is to cut the amount of product in the distribution chain, Labbe said. Reducing total inventory requires frequent movement of small lots of product.
Some of this additional freight volume may be absorbed by rail intermodal carriers. "I personally hope that somebody can make intermodal transportation work, because if we don't, all that additional traffic will spill onto the public highways," Labbe said. "I would like to see intermodal grow as fast as it possibly can. It won't be a competitive problem. There is plenty of freight for everyone."
Trucking leaves a great percentage of its potential profit at the loading dock, Labbe said. "We recently conducted a study that shows drivers spending 44 hours a week waiting to load, loading, waiting to unload, and unloading," he said. "That is roughly two-thirds of the duty time available to drivers."
A simple calculation shows how much money is lost with all this waiting. "We used a published operating ratio of 94.64," Labbe said. "We used government statistics that suggest 91,300 trucks in refrigerated for-hire trucking. The next step was to compare the average number of miles a tractor runs a year to the miles it could run if the driver did not spend so much time waiting. Multiply the potential number of miles for the national fleet by the operating ratio, and we find that the US domestic refrigerated for-hire trucking fleet is losing $548 million a year in profit. Note that we are talking about operating profit, not mere revenue. If we could reduce waiting to zero, we could add more than half a billion dollars to industry profit. Just cutting waiting by 10% would be worth the effort if it added $55 million to profit."
Drop-and-Hook Operations Drivers for dry van carriers spend less time waiting because their employers have some drop-and-hook operations, Labbe said. However, because of size, the amount of money dry van carriers are leaving on the table is staggering. "We estimate that dry van carriers lose $1.05 billion in profit annually by allowing their drivers to wait for loads," he said. "In total, truckload carriers lose $1.5 billion to excess waiting time. For that much money, I should think that shippers, carriers, and receivers could work out some compromises."
Every group in this equation works from different motivations, Labbe said. The producer wants its goods in the market. If the product is not available, the consumer will purchase something else. Receivers want to operate with the highest number of inventory turns possible at the lowest landed cost. They want maximum productivity from their facilities and no out-of-stock conditions for their customers. Carriers want to operate in balanced lanes at a profit.
Finding Paths to Profit Several alternatives are available to ensure those profits, Labbe said. Many carriers do activity-based costing and then charge specifically for the services they provide. If the customer resists paying rates based on costs, carriers can turn down freight. "That is clearly the most effective method of controlling costs," Labbe said. "You simply do not have to do business with customers that want freight hauled below cost."
Another way to generate profit and balance is to negotiate with the shippers. Many shippers are beginning to understand that they can move money to their bottom line if they will cooperate to improve productivity, Labbe said. Shippers understand that there is enough money in the system to pay for changes. They will work with receivers to get freight unloaded without involving motor carrier drivers, but they want some relief on rates. "If arrangements can be worked out to get trucks moving more quickly so that carriers can generate more revenue with each piece of equipment, shippers deserve some consideration on rates," he said.
Some shippers such as Procter & Gamble have begun charging their customers an additional fee if freight is delayed, Labbe said. This is done to ensure that product gets to the store on time and is available to consumers. "It must work, because I have heard reports from truck drivers who say that they have been pulled away from the dock during unloading, because a truck from Procter & Gamble had arrived for its appointment," he said.
The alternative to working with shippers and receivers for more productivity is to ignore the situation. "That will work," Labbe said, "but it will result in thinner and thinner profit margins until operation is no longer possible."
The logical way to achieve improved productivity is for carriers to make a plan and present it to shippers. Together, shippers and carriers can present some alternatives to receivers and have the potential for action. Otherwise, carriers are left with the prospect of banging their heads against the brick wall that talking to receivers alone has been for years, Labbe said.
Motor carriers need to get a productivity plan in place because the next four years hold the prospect for good business, but also for exceptional pressure, Labbe said. The outlook for freight volume is very good. Carriers can look forward to sustainable growth.
However, this growth will come at a price. Carriers will find it necessary to become more flexible, Labbe said. Increased freight volume may be the result of handling a wider range of freight. This could include hauling dry freight and refrigerated products in the same trailer. As manufacturers and distributors wring the excess out of inventories, they will want smaller shipments on a more frequent basis. For some customers, this will require mixed shipments. "We know this is possible because food distributors are already handling mixed deliveries," he said. "It may not look enticing, but it is a significant opportunity."
Stall Food Safety Regulations with Industry Action Food safety needs to become one of the main focuses in food distribution. Everyone needs to focus on food safety, because typically every participant in the industry wants to claim that problems belong to someone else. "It's not me; I'm doing my job right," Norm Spear told the Refrigerated Division of the Truckload Carriers Association meeting in Vail, Colorado.
Spear is retired from Thermo King where he served as vice-president of product planning. He has since become the spokesman for a voluntary group of food industry representatives who are attempting to propose voluntary guidelines for food safety during transportation and warehousing. This group, which meets periodically, includes representatives from 24 trade associations and roughly 10 from the federal government.
Each of the government agencies involved believes that it has both the right and the authority to regulate food safety, Spear said. Three things become immediately clear about potential government involvement in food safety regulation. "First, government generally doesn't have a clue about the role of transportation in food distribution," he said. "Second, all 24 private sector associations agree that government action must be avoided if possible. Third, the private sector has to take charge and solve the problem if it is to keep government out of the picture. One way or the other, we are going to have improved controls on the transportation of refrigerated foods."
Warehousing and Transportation The first step in solving food safety problems is to define the scope of the issue, Spear said. Food safety concerns can crop up anywhere from harvest and processing to warehousing and distribution to retail display and home preparation. "Our concern is the middle section-warehousing and transportation," Spear said. "We have no expertise or influence on har-vesting, packing, and processing. Nor do we profess any desire to become involved with retail operations or home preparation."
The groups involved in the private food safety initiative began collecting information about existing programs, Spear said. The task force reviewed more than 6,000 pages of documents. This data showed that the domestic food industry handles more than 640 million tons of food, moving it more than 276 billion miles annually. It serves more than 370,000 restaurants and more than 182,000 schools. Delivering to each of those twice a week results in more than seven million shipments a year and the possibility that actual deliveries could be as high as 12 million a year, he said.
The food industry must be doing most of its job correctly, Spear said. But the call for new food safety regulations has a reason behind it. When there is an outbreak of food poisoning, many people call Washington for help, and the people in Washington can't resist trying to do something. Doing something is necessary because opportunities still exist to improve on food safety. About 7,000 people in the US die from food poisoning every year, he said.
Food Poisoning Is Rare The causes of food poisoning are not endemic; rather, they are rare. That notwithstanding, one mistake in food handling can ruin a company, Spear said. Small causes have big results. In the Schwan's ice cream incident, one trailer tankload of contaminated ice cream mix resulted in 250,000 sick people. Hudson Foods no longer exists as an independent company because one machine for grinding beef was not cleaned properly one time. Two million pounds of ground beef were recalled and Hudson Foods was sold to a competitor.
Currently, the bulk of food safety regulation applies to the processing segments of the industry, especially meat, fish, and poultry, Spear said. These industry segments are covered by regulations that require processing plants to adopt process control plans called HACCP-hazard analysis critical control points. These plans are site specific. The HACCP plan for one processing plant may not apply in the least to a different plant a mile down the road. "At present, no HACCP plans are required for transportation," he said. "Our goal is to keep it that way."
The government has its hands full trying to regulate food processing, Spear said. "If we can keep transportation clean, they will have no reason for imposing regulations on us," he said.
The task force has decided that the best approach is to look at the existing guideline for holes in the system, holes where food safety problems could slip through the net, Spear said. The task force defines a hole in the system as any point where controls are not sufficiently defined or monitored. The goal is zero risk to food safety.
Four Risk Categories Knowing where to look for holes in the food safety net is simple, Spear said. Risks can be placed into four categories. These are the capability of trailers and refrigeration units, the status of product and trailers when food is loaded, driver and equipment performance during transit, and proper temperature maintenance and airflow during transit.
Deficiencies in equipment are simple to detect, Spear said. Among them are refrigeration units with insufficient capacity to hold temperature in older trailers, as well as inadequate provisions for proper airflow. Exposed wood any place inside a trailer is a potential food safety hazard. Trailers used for grocery and food service distribution need extra refrigeration capacity to recover from the heat load imposed by opening the doors during a delivery stop. Bulkheads with fan kits are not adequate temperature control systems for multi-temperature operation. Refrigeration equipment without data logging capability represents a problem as does an inability to detect blocked air flow, he said.
Checking the status of a trailer and product at loading time can prevent food safety problems, Spear said. Trailers should be clean and sanitized and equipped for proper airflow around the load. Trailers should be precooled to the proper temperature prior to loading. Products should be loaded directly from a temperature-controlled environment into a precooled trailer. Product should be at or below the maximum temperature requested during transit at the time of loading, and it should be loaded so that airflow around it is unimpeded on all six sides.
"We all know what the temperature is in a trailer after the doors are closed," Spear said. "Why can't we get the same information about air flow? We need to challenge the refrigeration unit and trailer manufacturers to develop a sensor that can monitor air flow and alert the driver if an air passage becomes blocked."
If necessary, the trucking company should have documents available to show what loads have been handled in the recent past, Spear said. "Right now, only 44% of respondents to a survey by the food safety task force maintain records of previous loads by trailer number," he said. "The information may be available, but carriers do not have it consolidated for ease of access."
Temperature Maintenance The shipper should be responsible for recording the pulp temperature of product as it is loaded, Spear said. Temperature maintenance should be verified by on-board data logging equipment that records internal box temperature at one-hour intervals as an absolute minimum. In addition, drivers should physically record product temperature periodically.
Another problem to check for as trailers are loaded is mixing product, Spear said. Products that need to be transported at different temperatures should not be loaded into the same trailer if it is not equipped for multi-temp operation.
Loading procedures could be a problem for carriers, Spear said. A recent survey showed that only 66% of refrigerated loads are picked up from temperature-controlled docks.
Strict Trailer Cleaning Procedures Beyond following guidelines for temperature recording and loading procedures, refrigerated carriers should follow strict procedures for cleaning and inspecting trailers prior to loading. Trailers should be thoroughly cleaned to remove all sensory debris. "That means a smelly trailer is not a clean trailer," Spear said. "Rinsing may not be enough. Use hot water and soap. If a trailer smells bad, it's dirty. If it looks dirty, it's dirty. If it feels gritty or oily, it's dirty.
Washing is the only solution for preventing cross-contamination between loads with different potential for food safety hazards, Spear said. A trailer that has been used for fresh poultry or any other product that wets the trailer surfaces must be washed and sanitized before the next load. Ideally, a carrier would retain these wash records for a minimum of a year. "Carriers need not keep the records with the trailers, but they should be readily available to any shipper who requests verification of trailer washing," he said.
After washing a trailer, check the drains and channels in the flooring, Spear said. Clean out blocked floor drains and remove any debris from the floor ducts. Air flow under a load is difficult enough to ensure without blocking the floor channels, he said.
Drain Trailers Thoroughly After trailers are washed, they should be drained thoroughly. Any water left in a trailer will evaporate and refreeze to the evaporator coil as soon as the refrigeration unit is started, Spear said. Loading is a critical time in the transportation process anyway. The last thing a carrier needs is for the refrigeration unit to freeze up and go into defrost just as soon as the doors are closed, he said.
Trailers should be inspected for physical damage prior to loading. This includes cracks in the interior lining and torn door gaskets, Spear said. Cracks in the lining or serious dents in the pressure bulkhead at the trailer nose can harbor bacteria. Broken wall liners also can allow water to enter insulation and reduce the thermal efficiency of a trailer.
Refrigeration units should be carefully inspected prior to operation. Manufacturers now provide units that will run an automated pre-trip inspection, Spear said. Carriers should take advantage of these features to ensure that equipment offered shippers will work properly.
Purchase High Quality Equipment One easy way to forestall government intervention in food transportation is to purchase high quality equipment that will maintain temperature and product integrity in transit, Spear said. The first step is to purchase equipment with sufficient refrigeration capacity for the job. The food safety task force recommends a safety cushion of at least 30% excess capacity as defined by the Refrigerated Transportation Foundation. "In Europe, the law requires new trailers and refrigeration units to have 75% excess capacity and that equipment be retested and certified every seven years," he said. "Data loggers are required in Europe. According to our survey, only 28% of US carriers use data loggers."
Thermal efficiency involves more than a big refrigeration unit and insulated sidewalls. Trailers must be built with high air flow flooring, Spear said. The deeper the floor cross section, the better the air flow will be. To allow air to be pulled around the load and back into the unit evaporator housing, trailers should be equipped with pressure bulkhead at the nose. At no time should loads be allowed to block this return air path. Air delivery chutes that carry air to the rear of a trailer and spill air down the side of a load should be a requirement in all new trailers.
Carriers should use trailer specifications that eliminate the possibility for cargo contamination, Spear said. This means no exposed wood anywhere in a trailer. Ideally, the inside of all trailers should be food grade plastic.
All trailers should be certified by the Refrigerated Transportation Foundation and should carry an RTF identification plate, Spear said. This plate indicates whether trailers are designed for refrigerated, frozen, or deep frozen service.
Finally, refrigeration units should be equipped with electronic data recorders. These recorders should sample trailer air temperature at least once an hour, Spear said. Recorders available with new refrigeration units allow for up to six separate temperature probes.