How Will California Budget Woes Affect Expediters?

ATeam · Jun 3, 2009

Gov. Arnold Schwarzenegger said yesterday that "California's day of reckoning is here." and "Our wallet is empty. Our bank is closed. Our credit is dried up."

Like everyone else potentially affected by his proposed massive cuts, I immediately looked to see how Diane and I might be hit. Will Bolsa Chica State Beach be one of many state parks closed? Will we lose one of our favoirte parking places, hangouts and daytime layover locations in the LA area? Nope. The published list does not include Bolsa Chica.

It seems that the quality of life in California is about to take a steep dive. With Diane and I having no roots in the state but traveling in and out of it as expediters, I am wondering how expediters might be affected.

- Will we have to worry about increased response times if we need an ambulance?

- What of the quality of emergency room services? We have good insurance but will the health care providers be available and as good as before?

- What of roads and traffic?

- Will law enforcement ramp up and level more fines to boost revenue, or will scale cops be cut as a cost saving measure?

- If we need to call a cop, will they be as available as before?

- Sales and other taxes...will it be best to defer purchases until we leave the state? (We do that now with oil changes because of environmental fees not charged elsewhere.)

- What new taxes, fees and surcharges might be imposed on expediters who travel in and out of the state?

- If tens of thousands of non-violent offenders are given early release from prison and certain other programs are cut, will the street-people and panhandler population grow? Will there be more beggars on the corners and more prostitutes and panhandlers working the truck stops?

Each of these items has the potential of affecting our life and work in California when expediters enter and operate in the state. Can you think of others? Are any of the above a real concern?

I am hoping we can keep this thread out of the politics and focus on expediting business concerns. I am asking a practical business question here, not making a political statement. Specifically, how will California budget woes affect expediters?

If you have a political statement to make about who is to blame or why one party or another is evil, kindly do so in this thread in the Soapbox forum.

louixo · Jun 3, 2009

Phil, I don`think you`ll have to worry that much. Right now it`s scare tactics and media hype. I`m sure they will sort it out in California. Things will change, but they always do anyway. I doubt that there will be any great burden or cost on any particular group. Business always passes the cost on to the consumer even if they institute fees on some services used by truckers in the beginning. It will level out over time.The media scare tactics just make the great unwashed more malleable, so that they are prepared to make the concessions the politicians want , and it makes it easier for the politicians and corporations, who own the media anyway to conduct business as usual. Go to the library, and look in the archives at some back issues of any newspaper. Concentrate on 1925-1945, and you`ll see that none of this is new, it`s the same old same old. The only thing that has changed are the players.

Scuba · Jun 3, 2009

Cali is doing what every state does claim they will cut back on cops and critical needs. This gets people that dont know how to think saying we need to bail them out when they could just sut aid to illegals and they would be in the black. Fact if they cut back on cops first reaponders they could be sued for taking to long to respond and a state like cal cant cut back on firefighters its a scare tactic

greg334 · Jun 3, 2009

Why are there two threads on the same subject in two different parts of the forum?

Turtle · Jun 3, 2009

greg334 said:
Why are there two threads on the same subject in two different parts of the forum?

Because they are two different subjects, even though they're not. This thread, for example, according to the OP, is supposed to be about how California's woes affect expediters, yet the OP poses many questions that have far more to do with politics and tourism than expediting. The other thread is supposed to be about politics, not expediting, but then talks about low freight levels, expediters in near ruin, and general economic principles and misconceptions, you know, everything but politics.

If you go off-topic within the topic thread, is that going off-topic, or is off-topic the actual topic? You gotta first baseman? Certainly. What's his name. That's right. When you pay off the first baseman every month, who gets the money? Every dollar of it. All I'm trying to find out is the fellow's name on first base. Who.

davekc · Jun 3, 2009

Turtle said:
Because they are two different subjects, even though they're not. This thread, for example, according to the OP, is supposed to be about how California's woes affect expediters, yet the OP poses many questions that have far more to do with politics and tourism than expediting. The other thread is supposed to be about politics, not expediting, but then talks about low freight levels, expediters in near ruin, and general economic principles and misconceptions, you know, everything but politics.

If you go off-topic within the topic thread, is that going off-topic, or is off-topic the actual topic? You gotta first baseman? Certainly. What's his name. That's right. When you pay off the first baseman every month, who gets the money? Every dollar of it. All I'm trying to find out is the fellow's name on first base. Who.

That is hilarious. I think the OP believes he is much smarter than the ones that may be reading.

Streakn1 · Jun 6, 2009

As an expediter of time critical aircraft engines and parts, Califorinia's financial woes are of no real concern to us. Ninety-nine percent of our freight base runs from Arizona east.

We have the option of declining any CA load that may come our way, and do so without affecting our bottom line to a noticable amount. There is plenty of freight availible to us elsewhere.

arkjarhead · Jun 7, 2009

I've been watching the DOTs out there a little closer when they are inspecting my equipment. I had a DOT tell me that they have been told to start issuing more fines to out of state drivers to produce more revenue from their department. I caught a female DOT officer at Banning last week trying to make some kind of adjustment on one of my trailer brakes so she could write me up. I called her on it and she got very angry.

Poorboy · Jun 7, 2009

I Just Refuse to Go There anymore, and it Really Hasn't affected My Bottom Line Because it seems that Dispatch Has more than One Load Offer Available in Other States, So I Will Take those.

ATeam · Jun 15, 2009

California Budget 101: Making sense of the state's financial meltdown

June 15 (today) is the deadline date the state comptroller announced for a budget deal. The state's fiscal year ends June 30. It is a practical deadline. Without a budget deal, the comptroller will not have time to issue revenue anticipation bonds before the new fiscal year begins on July 1. Without them, the state will have to delay payment of its bills, starting at the end of July when the money runs out.

After the controller announced the practical deadline, the governor prohibited the issuance of revenue anticipation notes (some call them emergency loans). This changes the game to "balance the budget or shut down the government."

The next two significant dates are June 30 when the current fiscal year ends and the new one begins, and the end of July when the state is projected to run out of money if the budget is not balanced by then.

If the state starts paying its vendors with IOU's, services that expediters depend on may degrade. An example is the tow truck companies that are contracted to clear wrecks from the freeways. If their banks won't accept state IOUs as currency, fuel cannot be bought and employees cannot be paid.

Will banks accept state-issued IOUs as currency when the state is essentially bankrupt? I'm not so sure they will. Banks are under pressure to shore up their balance sheets. Accepting IOUs is granting loans in disguise. In this case, the borrower is California, an essentially bankrupt entity. In the current environment, bank examiners are not likely to look kindly on IOU loans to a state that is not credit worthy.

If the governor releases tens of thousands of non-violent offenders from prison, as he has said he will do, the street people population will grow because these people with criminal records will have a hard time finding jobs in a state where unemployment is already higher than the national average. I already get approached by beggars more in California than any other state. I am not looking forward to being approached by even more.

There are dozens of ways a bankrupt California can degrade the lives of expediters who travel in and out of the state to pick up and deliver freight. A bankrupt California will have negative effects on the national economy too, which may further depress the supply of available freight.

For those reasons, and many more, the California budget story continues to be of great interest.

ATeam · Jun 16, 2009

California officials, warning of fiscal meltdown, went to the federal government seeking emergency aid, saying California is too big to fail. Obama administration says no.

Calif. Aid Request Spurned by U.S.

greg334 · Jun 16, 2009

PANIC TIME!!!!

If the state starts paying its vendors with IOU's, services that expediters depend on may degrade. An example is the tow truck companies that are contracted to clear wrecks from the freeways. If their banks won't accept state IOUs as currency, fuel cannot be bought and employees cannot be paid.

Not likely, the tow truck companies can directly bill the insurance companies if they need to.

As for this having any effect on expediting, maybe with the relaxing of enforcement it may cause more work for some of us.

IF california is serious about fixing their money problems, then cut the CARB budget.

davekc · Jun 16, 2009

You never know. They can pass the law but won't have any money to enforce it.

layoutshooter · Jun 16, 2009

davekc said:
You never know. They can pass the law but won't have any money to enforce it.

They will enforce the CARB laws. Great source of out of state revenue. Besides, since the general public has no love for truckers there will be little fight.

davekc · Jun 16, 2009

layoutshooter said:
They will enforce the CARB laws. Great source of out of state revenue. Besides, since the general public has no love for truckers there will be little fight.

Probably true. That is why you are seeing these on the horizon. Bad news is they will use Fedex freight instead of CC to deliver them. These have been in Memphis for awhile. Maybe something to the union threat soon to be coming.
http://www.expeditersonline.com/forum/fedex-custom-critical/36746-more-new-fedex-services.html

layoutshooter · Jun 16, 2009

davekc said:
Probably true. That is why you are seeing these on the horizon. Bad news is they will use Fedex freight instead of CC to deliver them. These have been in Memphis for awhile. Maybe something to the union threat soon to be coming.
http://www.expeditersonline.com/forum/fedex-custom-critical/36746-more-new-fedex-services.html

Yeah, It is most likely coming. You will all be supporting me soon. At my age, shoot, finished.

davekc · Jun 16, 2009

One never knows

I think they are doing that because UPS has something similar from another manufacturer.

layoutshooter · Jun 16, 2009

davekc said:
One never knows
I think they are doing that because UPS has something similar from another manufacturer.

A lot going on out there, most of it is scary.

greg334 · Jun 17, 2009

But Dave, I'm confused, what is the excitement over the Cryoport shipments?

I see it as FedEx offering cheaper rates to the customers and cutting out WG then CC completely, the thing can go on any truck.

Their worry is now the Teamsters, Congress and UPS, they are dumping money (MILLIONS) into the fight and may just lose.

layoutshooter · Jun 17, 2009

greg334 said:
But Dave, I'm confused, what is the excitement over the Cryoport shipments?

I see it as FedEx offering cheaper rates to the customers and cutting out WG then CC completely, the thing can go on any truck.

Their worry is now the Teamsters, Congress and UPS, they are dumping money (MILLIONS) into the fight and may just lose.

EVERYTHING is going against the small business owner in this country now. Fascism does not LIKE that. It wants all state owned business and industry and unions that they can control. Get used to it. Old guys like me are toast.