Environmental regulations in California have caused Timmerman Starlite Trucking, Inc. of Keyes to announce it's closing after 40 years of service to hundreds of clients in 11 western states.
Company leaders broke the news to Starlite’s 30 employees Friday morning. The closure takes effect immediately. A skeleton crew will stay on at the yard north of Keyes near the freeway to sell off any remaining assets over the next 30 to 60 days. That includes Starlite’s fleet of 30 newer trucks as well as 150 trailers. Some leased tractors will be returned.
CEO Colby Bell cited the growing costs to upgrade its equipment because of the onslaught of state and federal regulations as reason for the decision.
“We tried to provide a healthy work environment for our employees and give them the best wages and benefits we could,” said Bell, “but in the end, the rates that were available did not support the cost structure needed to compensate our employees appropriately.”
Freight rates are the same or lower today than 10 years ago, but costs have risen nearly 40 percent with California Air Resources Board (CARB) and labor regulations, Bell noted. Many local trucking companies are feeling the pressure of shrinking margins and increasing regulations.
Regulations enacted in 2007 required haulers to upgrade equipment to meet cleaner air standards.
"So you’re getting 33 percent less miles on a unit for 40 percent more cost.”CEO Colby Bell
“We complied a little bit early just because we’ve been the boy scouts who are trying to do things the right way,” said Bell. “So now we have brand-new equipment. My old equipment was $100,000 and ran forever. I’d get 1.2 million miles out of an older tractor. This new equipment breaks down more frequently and maybe lasts 800,000 miles. So you’re getting 33 percent less miles on a unit for 40 percent more cost.”
He said while the manufacturing industry strives to improve things with each year, the state ever tightens regulations to where “it’s kind of like chasing your tail, trying to continue to improve.”
Bell has served on the Small Business Opportunity Board for CARB to provide a voice. He said there is a lot of misinformation among state bureaucrats and the general public about the trucking industry.
“They listened to what we’re saying and trust me, the air’s a lot cleaner today because of the work the industry has done – and we’re proud of that – but the rate structure is (holding arm flat) and the cost structure is like this (arm at an incline). The family was just in a position where we could not continue to operate without risking financial devastation.”
Bell said California’s regulations squeezing out small haulers means the larger companies will remain.
“If you’re an interstate carrier that operates in 50 states and you can make money in 49, you can lose a little in California while the pressure’s on, and over time you know that things are going to equalize. But, yeah, the smaller carriers are stressed. Most of them are family companies. They’re not capital rich and it’s a heavy capital industry to be in. They’re pulling $200,000 worth of equipment and that’s a lot of money when you think about almost a 40 percent increase in costs over the last 10 years but no change in the revenue.”
Bell said his goal is to help all of them find jobs with other local trucking companies.
“Our priority was to ensure that our employees, who are like our family, could continue to provide for their families and minimize any fiscal impact to them,” Bell said. “We are blessed with great relationships that we feel will result in nearly everyone having work immediately.”
Starlite was founded in 1979 in Ceres by the Timmerman family which lives in Oakdale and Modesto. It quickly became known for its work in the agriculture industry, particularly transporting almonds and walnuts. Starlite’s vehicle fleet included hoppers, flatbed trailers and other equipment to get products from the field to processors and then to distributers.
Starlite also offered refrigerated transportation services to many of its clients.
Shawn Yadon, CEO of the California Trucking Association, said he is saddened to hear about the Ceres company’s closure.
“This is further proof that California must take a very hard look at its business environment,” said Yadon.
He said Starlite had been an active CTA member for 28 years and said “its contributions to the industry are greatly appreciated.”
The Timmerman family, which still owns the company, expressed its appreciation to current and former clients in the ag and business communities for allowing Starlite to compete successfully for 40 years. The biggest customer was Gavalon out of Omaha, Neb., which ran a flour mill in Oakland. Starlite delivered byproduct to dairies and feed mills in the Valley. Foster Farms has also used Starlite’s services.