Trucking company demands higher rates from grocers

| 8/9/2005

Everybody talks about the higher cost of fuel, but the folks at A&I Transportation are actually trying to do something about it.

Bob Lopez, general manager for the Watsonville, CA-based produce hauler, said his company has notified grocery store chains Albertsons and Safeway that it will no longer haul produce for them unless they pay a fuel surcharge of at least 40 cents per mile.

Lopez said the company, which has about 50 trucks that haul produce from California to grocery stores throughout the West, currently gets about 26 cents per mile, and that just isn’t cutting it.

“You figure at (diesel prices of) $3 a gallon, it’s pretty bad,” he said. “When your trucks get five to six miles a gallon and you’re going 900 miles, the cost to get that produce from point A to point B is a little ridiculous.”

Lopez said his company told the retail giants that it needed more money, but it wasn’t meant to be a threat.

“We’ve got to approach it professionally,” he said. “We’ve got to ask politely. We need an increase, and if we don’t get it we have to stop.”

While the stores have not yet given an official answer, Lopez said he is hoping for a compromise. He said he expects feedback within another week or so.

The only problem Lopez foresees is the very real possibility that the grocery chains could simply decide to give their business to someone else. If that happens, Lopez said he’d find other businesses to haul for.

“We have to do what’s right for our company,” he said. “We’ll have to go search elsewhere, and let them kill the next competitor for what they want to do it for.”