There’s a lot of talk about soaring truck rates, including produce, and how long these levels will last, considering January is typically one of the poorest months for decent rates. Nobody really knows, so it is going to be very interesting once spring produce volume starts kicking in with March.
In January, some truck rates exceeded $10,000 from the Imperial Valley of California to New York City. This compares to a $6,000 to $6,200 rate in January 2017. Two years ago, the rates were $5,800 to $6,000 to New York.
Florida has a similar situation where produce rates from central and south Florida to Baltimore were up 30 percent a week ago compared with the previous week, grossing $2,700 to$2,900. The same time a year ago those rates were $1,900 to $2,200, and $2,100 to $2,200 two years ago.
While Florida volume is seasonally low compared to what it will be in April and May, product is moving fast partly because the Sunshine State has a significant freight advantage over Mexican vegetable shipments to many eastern seaboard markets.
In the Red River Valley of North Dakota and Minnesota a bumper red potato crop is 46 percent larger than a year ago. Yet some observers believe potato shipments could be up to 20 percent more if the trucks were available.
Potato rates from Grand Forks, MN are $3 per hundred weight (cwt) higher than last year to South Florida, putting the gross freight rate at $6000. Rates to Boston from the valley are up $2 per cwt. and $2.50 to Chicago.
Significant credit has to be given President Trump cutting regulations, as well as the recent tax bill which is helping spur the economy. Business is booming for many. This has increased demands for transportation services, plus there is a scarcity of qualified drivers, leaving many shippers scrambling to ship sold product. There also are the adverse consequences of the electronic logging device mandate, making it difficult if not impossible to fudge on hours of service.
Many see a need for changes in hours of service. For example, time spent waiting at loading docks counts against operating hours. Produce is a supply and demand business and demand simply is outstripping the supply of available drivers.