Business backs up when Grapevine closes
| Friday, Dec 18 2009 07:48 PM
Last Updated Tuesday, Dec 22 2009 05:36 PM
Something to think about if a weather-related closure strands you on the Grapevine: At least you don't have a lot of money or valuable product riding on the passage.
Danny Mairs should be so lucky. His company, Cox Petroleum Transport, hauls fuel back and forth between Los Angeles and its base in Bakersfield. When the Grapevine closes unexpectedly, he can send his drivers on a long, alternative coastal route, or have them wait it out on Interstate 5.
Either way, it comes out of his budget.
"You've got additional costs that impact your business when that road closes," said Mairs, the company's president and CEO.
The Grapevine, a short but critical stretch along one of the West Coast's major transportation arteries, is intimately linked to California commerce. When ice, high winds or mudslides force its closure, as usually happens a few times a year, businesses pay the price -- and by extension, so do consumers.
Trucking companies and public safety officials trace the problem to Californians' general inexperience with tough weather conditions. In places like the Rockies, drivers are often told to put on snow chains and plow through.
Safety first
Safety is the overriding concern when the California Highway Patrol makes the decision, in consultation with the state Department of Transportation, to close the Grapevine. Officials say they are aware that a closure costs businesses money, but that the consequences of leaving it open can be much worse in terms of accident-related delays.
"We understand," Fort Tejon CHP Sgt. Craig Whitty said. "We get phone calls from the governor's office and we get phone calls all the way down ... about when we can get this thing open. And it's a No. 1 priority to keep this thing open. But our first priority is safety."
Not everybody suffers economically when the route closes. Nearby hotels and restaurants report a surge in business when it happens. But the negatives effects tend to be more widespread.
Added costs
Mairs estimated that waiting out a closure costs him an additional $100 to $200, and that taking a coastal route runs him an extra $250 to $300.
The California Trucking Association shared an industry estimate that Grapevine closures cost $1,000 to $1,500, depending how long the route remains shut.
The events have taken on added significance with the advent of just-in-time delivery in much of the retail industry, association spokeswoman and vice president Julie Sauls said.
Many stores no longer keep back-up inventory on hand, and so they rely on trucks to bring in new goods to replace products shortly after they're sold. Sauls said this can compound the problems caused by a Grapevine shutdown.
"Over time it'll add into the cost of delivering goods in that area," Sauls said, adding that shoppers ultimately pay more money for products as a result.
Snowed in
Employees unable to make the commute into work also inflict economic damage, though the impact is less than caused by stranded trucks. Bakersfield human resources consultant Robin Paggi said this is less of a problem for large companies than for small ones because they have fewer staff to cover for absent workers.
"I think it really depends upon the size of the business," said Paggi, who works for KDG Human Resource Solutions in Bakersfield.
Making do
Despite the burden on commerce, businesses generally understand that safety trumps profits.
"Obviously drivers in Southern California are not totally accustomed to driving in snow, so I think (CHP officials) are very wise to shut it down when they do," said Ron Lallo, president of Bakersfield-based Gazelle Transportation, which ships fuel in California, Utah and Colorado.
Gazelle no longer trucks much petroleum over the Grapevine, Lallo said, but when it did in years past, Grapevine closures "put us on our knees."
Costs can spiral when the route closes because drivers of big rigs are prohibited by law from spending too much time behind the wheel. That means trucking companies have to send someone out to take his place, when means additional man-hours.
"Obviously there's no way to recover the lost revenue from it. But we made do with it for a number of years," he said.
"How much can you battle Mother Nature?" he asked.
Back-up plans
When possible, companies take measures to prepare for a closure. If they hear that a storm is coming, they might load up on supplies ahead of time.
Also, some businesses try to minimize their reliance on timely deliveries by keeping a healthy inventory. That's the strategy at the Ikea Tejon Distribution Center just north of the Grapevine.
When the I-5 shuts down at the Grapevine, "it's more of an inconvenience -- something that we don't like to deal with," said the center's operational support manager, Lance Renteria.
Mairs, the executive at Cox Petroleum, said his team does its best to avoid the Grapevine if it foresees trouble.
"When we know there's a storm coming," he said, "we also fill stuff up and make sure that we have extra product in customers' tanks."
