Posts Tagged “transportation rates”

Transportation Rates Are Lower, But Many Remain Higher than Last Year

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DSCN0299It is a bit amusing watching the produce industry’s reaction to transportation rates and other issues.

Little thought is given to transportation – trucking or rail – until there are problems.  Those problems almost always center first on what’s the cost of the truck?  Find the cheapest truck available is pretty the industry’s unwritten motto.

This has typically been most true after demand for refrigerated equipment subsides entering the fall as produce volume is seasonally lower.  It continues until around March or so when spring produce shipments are increasing and demand for equipment rises accordingly.

Since last year this has all changed.  Another cycle in trucking has arrived.  These cycles typically last maybe three to five years.  The cycle that has ended saw rates for produce truckers remain pretty stagnant.  A sluggish economy with stagnant wages did not present as many attractive employment opportunities.

That’s now in the rear view mirror as demand for trucks, and drivers is often outstripping supply.  Now there’s near panic is some produce industry corners. Not only are freight rates substantially higher, but getting a truck at any cost is often a challenge.

Truck rates have recently backed off some, but spring is coming soon and we’ll see how long that trend lasts.

The federal mandate for electronic logbooks certainly isn’t going to help no one.  Truckers currently are allotted 14 hours of operating time, but how often do they waste much of this time at loading and unloading docks? When multiple pickups and drops are involved, the problems is only compounded.

While truck rates have plunged from only a month ago, they are still much higher than a year ago.

Rates from the California desert are currently about $7,400 to  New York City, off 15 percent from three weeks earlier.  However, the current rate is still 20 percent above the same time a year ago.

For a load of apples out of  the Yakima Valley in Washington state the gross freight rate is around $4,600 to Dallas, 20 percent below only a few weeks ago, but very similar to rates at the same time last year.

Rates from south and central Florida for tomatoes and veggies are mostly below $3000 now, which is 20 percent more that a year ago.

 

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