Posts Tagged “produce rates”
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.
Dozens of different types of produce items, led by vegetables, represent crossings at the Mexican border into Nogales, AZ, as well as into the Lower Rio Grande Valley of Texas. While produce haulers are feasting on higher freight rates, produce shippers are hoping freight costs will subside soon.
Last week rates on Mexican produce coming through Nogales were higher for some destinations with driver and equipment shortages reported. For example rates from Nogales to Los Angeles were generally ranging from$1,800 to $2,000 per load, a 6 percent increase from a week earlier, but 50 percent higher than the $1,200 rate at the same time during the past two years.
A few rates exceeded $10,000 from Nogales to New York City last week, but recently have dropped as much as 15 percent.
Tomatoes (all types) are providing the heaviest volume at around 1,150 truck loads a weeks. About 900 truck loads of cucumbers are crossing the border each week with squash and bell peppers also having good volume.
Shipments Through South Texas
In the Lower Rio Grande Valley of Texas some shippers can’t remember such serious truck shortages for this time of the year. One citrus shipper needed 20 trucks to cover his loads a couple of weeks ago. For a six-week period ending with the first week of January, rates for citrus from the valley to L.A. have soared from $2700 to $5500. Overall, South Texas produce rates are generally up about 20 percent from a year ago.
Produce rates from South Texas to Chicago have been ranging from $4000 to $5000, with the average being around $4500, still quite a strong rate. Produce haulers were grossing around $8800 to New York City.
Mexican tomatoes are providing the heaviest volume with about 1000 truck loads a week, with avocados about one-half this volume. Other leading items range from limes to various types of tomatoes and broccoli.
South Texas grapefruit and oranges are averaging about 350 truck loads each week.
The New Year started off with good news for owner operators and small fleet owners, but had those in the produce industry anguishing over the cost of transportation rates.
A few coast-to-coast rates out of California actually topped $10,000 with the beginning of January. Produce rates have soared as much as 30 percent from some shipping areas. It has caused some int he produce industry to consider rail service, something they seldom think of when rates are more in line.
Depending on whether you are a trucker or a shipper and whether you have contract rates or are dealing in the spot market has a big affected on how you view the rate changes.
Washington state apple rates out of the Yakima Valley in early January to Boston were grossing about $8,400, which mean an additional one dollar cost onto a each 40-pound box of apples. While produce haulers like it, not so with produce receivers.
Vegetable shipments out of the Imperial Valley of California to New England led by head lettuce was grossing about $8400, about $2200 more than at the same time two years ago.
Electronic logbooks, which recently went into effect are being blamed for some higher rates, although it doesn’t appear the new regulations are really being enforced, at least yet. The new devices make it more difficult for truckers to fudge on their hours of service and if adhered to means drivers can travel fewer miles per week.
While it may be difficult to pinpoint the exact reasons for higher produce rates, undoubtedly an improving U.S. economy is creating a bigger demand for refrigerated equipment. Trucking is a hard life and a demanding one and with better economic conditions, many drivers are seeing other jobs becoming available, not only to make more money, but allowing them to be home more with family. Still, January is supposed to be one of the slowest times of the year for produce truckers as less volume of fruits and vegetables are generally available. If rates are ever in the tank it is often during the first quarter of the New Year.
While Washington state cherry shipments are in a seasonal decline, loadings from British Columbia are picking up.
British Columbia certainly is no Washington state when it comes to volume, but the Canadians do provide decent loadings for about a four to six-week period every year. Shipments from an area ranging from Kelowna to Creston are underway with about 100,000 cases already shipped. There is an estimated 500,000 additional boxes to be shipped. The season is expected to last through the third week of August.
California Produce Shipments
Stone fruit shipments continue steady from week to week out of the San Joaquin Valley, led by peaches….From the valley’s Westside district various melons are being loaded, led by cantaloupe, averaging about a 1000 loads per week….Moving to the Watsonville district movement continues steady with strawberries, averaging around 875 truck loads weekly. California produce rates continue to decline, some by as much 15 percent in the past week.
Watsonville berries and Salinas Valley vegetables – grossing about $6500 to New York City.
San Joaquin Valley stone fruit, melons and other items – grossing about $4300 Dallas.
Texas/New Mexico Produce Shipments
In West Texas, the Hereford High Plains area has light, but increasing volume with potatoes, with some shippers also in Eastern New Mexico. Southern New Mexico also continues to ship onions.
California produce shipments
These two areas on California’s coast are shipping Iceberg lettuce, all the mixed and specialty lettuces, cauliflower, broccoli and celery, plus dozens of other items in smaller volumes. California now has over 500 truckloads of head lettuce shipments weekly, mostly out of Salinas.
About the best thing for produce truckers this time of the year in California is fewer production areas, making it easier to get full loads due to the increased volume, plus a lot of product typically is loaded at one dock. This certainly beats wintertime when mulitple pick ups can start in Central or Southern California and extend to Coachella, the Imperial Valley and Yuma – and perhaps even Nogales. Not good.
Over the next two to three months California will be in its peak strawberry shipping period with 6 million to 7 million trays or more being shipped each week.
While Ventura County strawberries are in a seasonal decline, the Santa Maria district is shipping over 500 truckloads per week. Strawberry shipments are building from the Watsonville district, and will soon surpass Santa Maria in volume.
Salinas Valley vegetables and berries – grossing about $4300 to Dallas; $7100 to New York City.
Wisconsin Produce Shipments
Central Wisconsin potato shipments have leveled off to about 500 truckloads per week.
Wisconsin potatoes – grossing about $1000 to Chicago.
About the only other produced items being shipped from the Badger state are cranberries from such as areas as Tunnel City and Toma, or Babcock. There’s also some cabbage coming out of Southeastern Wisconsin.
Nebraska Potato Shipments
Nebraska potato shipments are averaging about 200 truckloads weekly. The Cornhusker state has two primary potato shipping areas. One is at O’Neill in the Northeastern part of the state, while the other is at Imperial, in the Southwestern are of the state.
Nebraska potatoes grossing about $2125 to Dallas.
Michigan Produce Shipments
Michigan potato shipments remain light, but continue to gradually increase.
Michigan also has increasing volume with apples, and onions, although all these items are modest in comparison to the leading states of Washington (apples) and Idaho (potatoes and onions). There are about 300 truckloads of apples being shipped weekly, while potatoes are less than half of this volume.
Michigan apples – grossing about $1000 to Chicago, while onions are grossing about 20 percent less.
Colorado Potato Shipments
The San Luis Valley will become more volume as the harvest has pretty much been completed. Volume is gradually increasing and currently averaging over 600 truckloads per week.
Colorado potatoes shipments – grossing about $2300 to Houston,.
I’ve been asked several times recently why produce rates from several areas around the country, including California, have declined in recent weeks. Many factors seem to play into this going beyond just the demand for trucks and for produce shipments by the produce buyers.
- First of all, it is February, perhaps the slowest time of the year for over all fresh fruit and vegetable volume – and shipments.
- It has been one hellacious winter over much of North America. When it is bitter cold, with ice and snow covered streets, people tend to hibernate. They go to their supermarket less frequently and when they do, often purchase less.
- With a hard winter, come added expenses, whether you stay warm by using home heating oil, propane, natural gas or electricity, or a combination of these items. This is resulting in some record setting utility bills for consumers. The more one spends on necessities such as these, the less cash consumers have to spend on food. While food is certainly a necessity, it still can mean fewer purchases, as well as more selective buying of fresh produce items that are cheaper than others.
Hang in there; we’ve got at least another month or so of winter weather. Until the weather improves, winter vegetables quit shivering so much, and start growing more, the winter doldrums will continue.
California and Arizona winter vegetables – grossing about $6000 to New York City.
Central Florida tomatoes and vegetables – about $2500 to New York City.
Late summer and early fall launches sweet potato shipments from several states. Before I go any further, sweet potatoes are not among the leaders when it comes to good produce rates. But neither are other basic “hardware” items such as potatoes and onions. There’s a reason berries and vegetable trucking rates are better; they are more perishable.
North Carolina is the leading shipper of sweet potatoes in the USA. The Tar Heel state has slashed acreage by 5,000 acres this season after a disaterous overproduction a year ago. The old crop has been finally clean up and you will now be loading sweet potatoes from the new crop, which means a fresher product with which receivers should be more pleased. Happy receivers result in fewer claims and rejections of loads. One other point. Receivers don’t care for green sweet potatoes. They prefer product that has been cured. Most sweet potatoes loads should be cured entering October.
Mississippi and Louisiana have been irrigating dry sweet potato fields, at least until Hurrican Issac arrived.
Louisana sweet potatoes apparently dodged the budget from Issac. Farms in southwest and central Louisiana received about an inch of rain from Isaac, and farms in northeast Louisiana between 4 and 4 1/2 inches. Harvest may be delayed up to week to allow fields to dry out.
No word on yet on how Mississippi sweet potatoe shipments may have been affected.
During some summers when produce shipments are in peak volume, so much product needs to be moved, and the demand for refrigerated equipment is so great, that already high rates then go through roof. It certainly has not happened this summer, and if anything, produce rates declined leading up to the Fourth of July holiday. The Fourth, being on a Wednesday, is felt by some to lessening the impact on rates.
Rates from major some shipping areas, for example in California, dropped 5 to 10 percent and more from the San Joaquin Valley, Salinas Valley, and Santa Maria.
A number of factors apparently resulted in the lower, although still healthy produce rates. For example, stone fruit shipments out of the San Joaquin Valley are down this year, freeing up some equipment. Other areas are shipping a lot less produce than normal such as Michigan (with fruit) and many Southeastern (watermelons, bluesberries and vegetables) states and in the South (Texas watermelons and melons in loutheastern states).
Still, the heaviest produce volume, on a national basis, usually occurs between May and August – and that still holds true this year.
In California, table grape shipments are winding down in the Coachella Valley, but the big volume is yet to come – from the San Joaquin Valley. Grapes have started from the Arvin (Bakersfield) district….The Salinas Valley remains heavy with vegetables shipments.
Southeastern Arkansas is in peak loadings with tomatoes.
Kentucky and Tennessee are now shipping tomatoes, zucchi, strawberries and peppers. Most shipments are on a regional basis.
Although we usually don’t think too much about ports and imported produce this time of year, various ports around the U.S. are receiving summer citrus. for example, there are arrivals of navel oranges from Peru. There is various types of citrus arriving from South Africa, Argentina, and Uruguay.
San Joaquin Valley fruit and vegetables – grossing about $7,500 to New York City.
South Texas watermelons – $3000 to Chicago.