Posts Tagged “fruit and vegetable shipments”
Records for both truck rates and shipping volumes were broken in the second quarter of 2018, according to a new report from the USDA.
The Agricultural Refrigerated Truck Quarterly, reviewed truck rates from April through June this year and provided an outlook for refrigerated trucks through the end of 2018.
“Indicators point to sustained high rates and tight capacity for the trucking industry, including the refrigerated truck market, through the end of 2018 and possibly beyond,” the report said.
In addition, the report said Hurricane Florence may have effects on the truck market in the months ahead, adding pressure to an already tight market.
“With demand for truck services projected to remain high, these combined factors could keep truck capacity scarce and rates high for the foreseeable future,” the report said.
Hauling the freight
Trucks continue to be the dominant carriers of freight, carrying 70.2 percent of domestic freight in 2017, according to the American Trucking Associations. Strong economic growth kept truckers rolling in the first half of the year, as real gross domestic product increased 4.2 percent in the second quarter of 2018, the USDA reported.
While the economy was heating up, unemployment reached a 10-year low of 3.8 percent in May.
Construction, manufacturing, or local driving positions through ride-sharing services offer competition to long-haul trucking positions.
Some trucking companies have increased drivers’ wages as a result.
Through the first half of 2018, ATA reported the freight tonnage hauled by trucks increased 7.9 percent,up from a 3.8 percent increase in 2017.
The report said DAT Solutions reported strong demand for trucking services caused truckload spot rates to reach a record high in June, topping a 15-month run of spot market rate increases. In the refrigerated truck market, DAT reported the national average spot market truck rate hit the highest point ever recorded, at $2.69 per mile in June, up $0.58 from June 2017, and $0.11 higher than the contract rate. While increases in contract rates typically lag four to six months, after a sustained increase in spot market rates, this year the lag has been only a few weeks.
Refrigerated truck market
Strong demand for trucks and large volumes has mostly affected truck rates for shipments of 500 to 2,500 miles, according to the USDA. The U.S. average refrigerated truck rate reached a record high in the second quarter, for shipments between 501 and 1,500 miles ($2.96 per mile), up 12 percent from the previous quarter ($2.64 per mile).
The U.S. average truck rate for shipments between 1,501 and 2,500 miles was still higher than usual at $2.45 per mile, but was 3 percent lower than the record high of $2.54 per mile, set in the first quarter of 2018. In contrast, average truck rates for shipments less than 500 miles, and over 2,500 miles, have remained within normal ranges.
Fruit and vegetable shipments
Reported U.S. truck shipments of fresh produce during the second quarter of 2018 were a record 9.65 million tons, 21 percent higher than the previous quarter, and 1 percent higher than the same quarter last year.
Shipments from Mexico were the highest in the second quarter, totaling 2.85 million tons and accounting for 30 pecent of the total reported shipments of fresh fruits and vegetables. Loadings from California totaled 2.24 million tons, accounting for 23 percent of the reported shipments. Movements from the Pacific Northwest totaled 1.55 million tons, representing 16 percent of the reported total.
The study noted until 10 years ago, California and Florida were the two biggest suppliers of fresh fruit and vegetables, during the second quarter. In recent years, both states have lost market share to the Pacific Northwest and Mexico, the USDA said.
The volume of shipments from Mexico through Texas reached a new high of 1.30 million tons during the second quarter of 2018, an increase of 8 pecent over the same period last year (1.21 million tons).
Five commodities accounted for 42 percent of the reported truck movements during the second quarter of 2018:
- Watermelons, seedless (11 percent);
- Potatoes (11 pecent);
- Apples (8 percent);
- Onions, dry (7 percent); and
- Strawberries (4 percent).