Food Prices Would Rise With U.S. Truck Rule, Executive Says

U.S. consumers would pay higher food prices under a proposed regulation limiting truck drivers’ hours, a grocery executive told a House panel.

Food stores would pay 3 percent more for shipping, Glen Keysaw, executive director of transportation and logistics of Associated Food Stores Inc., a retail cooperative based in Salt Lake City, told the House oversight committee’s regulatory subcommittee in Washington today.

“This industry operates on a razor-thin margin,” Keysaw said. “Any increase in operating costs will have to be passed on to customers in the form of higher prices.”

The U.S. Transportation Department is seeking to shorten the amount of time a trucker can be behind the wheel to 10 hours from 11. The changes would cost the trucking industry $1 billion, the agency estimates. A final version of the regulations, proposed last December, may be released by the end of this year.

House Speaker John Boehner, an Ohio Republican, is among lawmakers asking the White House to keep the 11-hour daily limit, saying fatalities have fallen since it took effect in 2004 and that the cost of a shorter driving day is too high.

Refrigerated Trucks

The rules would boost fixed costs to $90 a truck from $75, said Ed Nagle, chief executive officer of Nagle Cos, which runs temperature-controlled trucks outside Toledo, Ohio, for Kraft Foods Inc. (KFT), Nestle SA (NESN) and Sara Lee Corp. (SLE)

W.S. Badcock Corp., a closely held furniture chain, would see transportation costs increase between 10 percent and 20 percent a year, said Frank Miller, the Mulberry, Florida-based company’s director of logistics.

Business expenses must be weighed against an estimated $1.4 billion in costs to society as a whole, said Anne Ferro, head of the U.S. Federal Motor Carrier Safety Administration. About 500 of almost 4,000 large-truck fatalities were related to fatigue, she said.

Those costs include damage to property, cargo, roads and bridges, as well as lost productivity, workers’ compensation and medical care, Ferro said. The costs of lost lives and debilitating injuries are difficult to quantify, she said.

Industry Pressures

“These costs do not discriminate between safety advocate and small-business owner,” Ferro said. “They impact everybody.”

Ed Slattery, whose wife was killed in 2010 when a truck driver fell asleep at the wheel, said Congress can’t underplay the human costs. His two sons were were severely injured in the crash, and one was permanently disabled. The crash will end up causing more than $18 million in medical costs, he said.

“I don’t hate truckers,” said Slattery, of Cockeysville, Maryland. “I don’t even hate the driver who did this to us. I hate the situation where they have to make choices that are not good for them, they’re not good for their family, and they’re not good for the motoring public.

‘‘I am here to urge Congress and the White House not to cave to the political pressures of the trucking industry,” Slattery said.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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