Posts Tagged “truck rates”

April Truck Rates, Volumes Tank, But Better Times are Ahead

By |

Freight volumes and rates took a hit in April thanks to the COVID-19 pandemic., according to transportation analysis firm DAT.

Transportation analysis company DAT of Portland, OR reports in a news release its DAT Truckload Volume Index, a measure of dry van, refrigerated (reefer) and flatbed loads moved by truckload carriers, fell 19 percent from March and 8 percent from April 2019.

“With so many businesses closed or operating at low capacity, truckload shipments have plunged, which put spot rates in dangerously low territory for owner-operators and small carriers,” Ken Adamo, chief of analytics at DAT, said in a news release. “Some carriers parked their trucks to wait for better business conditions, but there’s still lots of available capacity as a result of the low volumes, which has kept rates down.”

The April load-to-truck ratio for vans was 1.0 nationally, which DAT said was the lowest level since February 2016. In fact, for three weeks in April, the ratio was less than 1.0, meaning there were more trucks than freight posted on the DAT network, according to the release. 

For the week of April 7, the USDA reported that fruit and vegetable truckload volumes were 110,327 (10,000-pound) units, down from about 147,016 units for the week of April 2 a year ago.

Spot reefer volumes were weak but ended April on an upward trend as fruit and vegetable harvests started to get underway. DAT said the reefer load-to-truck ratio was 1.7 in April compared to 5.6 loads per truck in March, matching at all-time low in April 2017.

The national average reefer spot rate was $1.92 per mile, down 25 cents compared to March and 23 cents lower year over year. according to DAT.

U.S. average diesel costs were much lower, at $2.39 per gallon in early May compared with $3.17 per gallon a year ago.

Truck Demand Should Improve

With the market bottoming out in April, the outlook should improve for truck demand.

Ratecast and Market Conditions Index—predictive metrics from DAT anticipate higher prices and volumes as states relax their stay-at-home orders, produce season begins and port markets like Los Angeles, Houston, Savannah, Ga. and Elizabeth, N.J., see more traffic.

“Carriers will not be able to sustain operations very long at current levels,” Adamo said in the release. “Spring produce shipping should offer some relief and put some needed upward pressure on prices in May.”

Read more »

California Strawberry Loads May Exceed Last Year

By |

California strawberry shipments could exceed last year’s volume thanks to increased plantings and higher yielding varieties.

Strawberry growers planted nearly 27,000 acres of strawberries for winter, spring and summer production this year, about 1,000 acres more than 2019.

The California Strawberry Commission of Watsonville, CA. reports the combination of increased acreage and the introduction of high-yielding varieties offers growers the potential of producing more than last year’s 202 million plus trays.

Ventura County accounts for 19 percent of the state’s acreage, Santa Maria has 35 percent and Watsonville has 45 percent.

As of March 9, the state had shipped nearly 8.5 million trays of strawberries compared to 4.3 million trays at the same time last year.

Well-Pict Inc. of Watsonville, CA was picking in Oxnard the second week of March and the area hit a peak at the end of March.

Santa Maria began loadings in late March, but the crop was slowed due to earlier weather issues. The areais now entering peak shipments.

Meanwhile, Watsonville shipments are ahead of schedule this year.

Red Blossom Sales Inc., Salinas, CA started shipment from Santa Maria the second week of March 9 but was planningt to start picking in Watsonville around April 30, as usual.

Bobalu Berries of Oxnard started its strawberry season in Ventura County and will be shipping from Watsonville in May.

Truck rates from Ventura County have plunged in recent days from 15 to 30 percent, depending on the market. Oxnard rates have dropped over 20 percent – strawberries and vegetables to New York City – about $6200; down 30 percent to Atlanta – now about $3900.

Read more »

Truck Rates Decline as More Equipment is Available

By |

As more trucks become available for hauling, truck rates have experienced a small decline, according to DAT Solutions in a report.

National average spot rates for dry van, reefers, and flatbeds continue to decline, the company reported earlier this month.

Included in the report: 

In a typical seasonal slump, the number of trucks on the spot truckload freight market increased 7.4 percent while the number of loads dipped 10 percent during the week ending January 19, said DAT Solutions, which operates the DAT network of load boards.
National average spot rates declined for the second straight week: 
– Van: $2.01/mile, down 4 cents
– Flatbed: $2.38/mile, down 4 cents
– Reefer: $2.37/mile, down 5 cents

Reefer trends

Truck posts increased 5 percent while load posts fell 15 percent, which caused the load-to-truck ratio to drop from 6.1 to 4.9 loads per truck. It’s been more than six months since the load-to-truck ratio has been below 5 loads per truck.
Average spot rates were down on several key regional reefer lanes and major markets across the country.
– Los Angeles: $2.92/mile, down 11 cents after an 18-cent decline the previous week
– Atlanta: $2.56/mile, down 5 cents
– Lakeland, Fla.: $1.46/mile, down 9 cents
– McAllen, Texas: $2.24/mile, down 7 cents
– Philadelphia: $2.90/mile, down 5 cents
– Chicago: $2.80/mile, down 14 cents after falling 13 cents the previous week

Below are some examples of truck rates from Oxnard, CA over the past year, which charts the decline in truck.

Read more »

Produce Trucking Rates Set Record for 2nd Quarter of 2018

By |

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).


Read more »

Freight Rates are Affecting Idaho Potato Delivered Price Contracts

By |

A19Playing the spot market with freight rates on fresh produce is common with owner operators and small fleet owners.  However, refrigerated fleets for years have often negotiated seasonal, if not year around rates.

The fleets see advantages to having more predictable produce rates with higher rates in the slower winter months, but lower ones during the peak shipping seasons of spring and summer.

However, record produce rates this past year has changed ways of doing business, not only for the fleets, but the produce shippers.  For example, uncertainty surrounding freight rates has resulted in some Idaho grower-shippers of potatoes to shy away from quoting delivered prices for potato price contracts.

Sun-Glo of Idaho Inc., in Sugar City, has chosen not to take on the risk of volatile transportation rates by quoting delivered prices.  The company has found trucking companies refusing to quote set rates, because of the uncertainties in trucking.  If those fleets are unwilling to take the risk of contract rates, then the grower-shippers are not going to risk giving delivered prices.

Much higher truck rates have occurred, at least in part, by the implementation of electronic logging device (ELD) regulations last year.  Higher truck rates is one of the biggest complaints of grower-shippers.  Instead, companies such as Sun-Glo are quoting prices for their potatoes, something which they are in control.

Other shippers are doing business in a similar fashion.  Wada Farms Marketing Group LLC of Idaho Falls, ID has indicated it may lose some customers this shipping season because Wada no longer is offering a delivered price contract.  It has some contracts with trucking companies to haul potatoes, but it is on a month-to-month contract basis.  Six month to one year contracts with truckers has become a rarity.  Since Wade Farms cannot get seasonal or yearly contracts with trucking companies, it is avoiding offering delivered price contracts to customers.

Wade Farms has even inserted some flexibility clauses into contracts.  For example. if there is an extreme shortage of trucks or holiday overages, it is not locked in to the same price.

Shippers have long complained of retail chains driving down prices on the produce they purchase.  Potandon Produce LLC of Idaho Falls, ID has pointed out in the current truck rate environments, some retailers are looking to drive down f.o.b. prices to maintain delivered costs.

In a effort to cut shipping costs Potandon say if offers potato buyers a premium Idaho potato, or it can source spuds from 16 other states which may be closer to their customers.  The company continues to seek alternative shipping methods to cut costs.

Potandon is still offering customers delivered prices and says it has the advantage of an in-house transportation department which is in constant contact with freight carriers to get the amount of trucks needed.

Read more »

Truck Rates 20% Higher than Last Year, After Being at Historic Levels

By |

DSCN0845Trucking produce rates set some historic highs during the summer.  While rates have declined since then they still remain will above the level of 2017.

For example, Mexican citrus, watermelons and vegetables crossing into the Lower Rio Grande Valley of Texas were $4800 to $5000 in mid August compared to $7800 to $8500 in the middle of June.

Salinas-Watsonville vegetables and strawberries were grossing $9100 to $10000 in mid June to Baltimore, but has dropped to mostly $8,100 in mid-August.

Washington’s Yakima Valley apples, pears and stone fruit were grossing about $8200 to Boston in mid-June, off from about $7,800 in mid-August.

While rates have come down from mid- and late June peaks, they have stayed high compared to previous years.

Historically, summer produce rates reach a peak in May or June and start tapering off in July.  This year was no different.  Historic peak rates in June of $2.70 per mile had dropped to $2.59 per mile in July, which includes fuel surcharges. Still the July 2018 produce trucking rates were 25 percent higher than the same period in 2017.

With the close of August no serious truck shortages from major produce shipping areas were being reported.  August rates were averaging $2.50 per mile, which was still higher than any period on record prior to this year.

Close observers of truck rates believe rates will continue to remain higher than in past years with reasons ranging from higher wages for drivers, ever increasing truck regulations, and a soaring economy with low unemployment. Additionally, there’s more competition for trucks from dry freight with the improved economy.

With the arrival of fall comes additional demand for equipment due to back-to-school activities, Halloween and demand for perishables from foodservices entities ranging from restaurant chains to school cafeterias. Fall crops ranging from apples to pumpkins and potatoes also increase demand for trucks.

While truck rates typically decline overall in the fall, some observers believe rates will remain higher, perhaps as much as 20 percent for the same time a year ago.


Read more »

Produce Shippers are Concerned over Rising Truck Rates

By |

A346Historically, the produce industry gives truck transportation and trucking rates little thought, unless they are having a problem getting their product loaded, or rates are on the rise.  Well, both are happening.

For example, several Northwest potato shippers have recently expressed concerns over what it cost to ship their potatoes.  They say the situation has become enough of a concern in various parts of the country that more regional potato crops are being plants. Being closer to major markets means less transportation costs.

Valley Pride Sales LLC of Burlington, WA recently complained about short truck supplies and is concerned the situation will not be improving anytime soon.  They also hear about a shortage of drivers.  The company has seen freight rates to East Coast for russet potatoes costing $9 per 50-pound carton.  This is seen as given potato shippers on the East Coast an advantage in the marketplace since they pay less for trucks.

New York Trucking Concerns

As with most companies in the produce industry, New York produce operations have seen escalating truck rates since 2017.  However, shippers there are complaining less than shippers elsewhere.  This is due to their location of being much closer to major Eastern metropolitan regions than Western and Midwest produce shipper.

For example, Torrey Farms Inc., of Elba, N.Y. observes the proximity to Eastern markets  places their operation with many within five to six hours drive time.  The company believes transportation will be a battle all summer long N.Y.  While Torrey Farms typically has adequate trucks during June and July, by the start of July truck supplies already were tight this year.

New regulations that implemented electronic logging device mandates has made it harder for truckers reports Paul Marshall Produce Inc. of Batavia, N.Y.  The trucking company notes two years ago the trucking lane from Elba to Chicago was pretty steady at  $1,000 per load.  In the summer of 2017, those rates escalated to $1,600.

At Turek Farms of King Ferry, N.Y.,  truck rates during the July Fourth holiday period were up 20 to 25 percent compared with a year ago.  The company notes the new electronic logging device mandate rules mean adding another day to any trucking route more than 500 or 600 miles.


Read more »

Michigan Produce Shipments Increase in Part Due to Higher Truck Rates

By |

136_3641Higher freight rates, particularly from western shipping states, are making Michigan summer produce more attractive to buyers and receivers.  The result is boosting Michigan produce demand and truck rates, because of the freight advantage of being closer to markets in the eastern half of the U.S.

The electronic logging device (ELD)mandate also is created with making trucking cost significantly more expensive.

For example, E. Miedema & Sons of Byron Center, MI will be shipping more summer vegetables to markets closer to home.  Michigan sweet corn shippers have a significant freight advantage over Florida corn to midwestern markets.  Sometimes Florida corn may cost as much in freight as the f.o.b.  Additionally, shipping to closer markets means the corn is that much fresher. Sweet corn will not start for a few more weeks.

Superior Sales of Hudsonville, MI is another shipper noticing higher freight rates determining where receivers source their product.

Van Solkema Produce of Byron Center, MI is another shipper finding more interest in their Michigan grown produce in part due to the lower transportation costs.

As a result over the past five years the shipper has started handling items beyond the traditional staple produce items such as brussel sprouts and green onions.

Naturipe Farms of Estero, FL also handles Michigan blueberries.  They ship Michigan “blues” to practically every major midwestern retail chain.

Michigan asparagus shipments also has experienced changes in the last few years.  Michigan “grass” used to be known as a local product with distribution mainly limited to in-state receivers.  It eventually widened its appeal and extended to markets on the east coast.  This season a significant amount of Michigan asparagus is being shipped to destinations west of the Mississippi River.  There are now even a couple of West Coast companies that are marketing asparagus for Michigan shippers.  The asparagus season in Michigan is just wrapping up.


Read more »

Truck Rates Show Big Increase and May Not be Over, According to New USDA Report

By |

A13Refrigerated truck rates on the spot market for fresh produce reached 40-year highs at the end of 2017 and early 2018.  At the same time fruit and vegetable tonnage approached record levels.  Meanwhile, the spike in rates may not be over, according to the USDA’s Agricultural Refrigerated Truck Quarterly, a 31-page report published in March.  Continued economic growth may also encourage the upward push on rates.

All sectors of the trucking industry were affected in a similar fashion  by the driver shortage, capacity issues and higher rates, which  squeezed the transportation for fruit and vegetables.  Because of less truck capacity, many are concerted about widespread disruptions in the supply chain.

Trucks account for around 70 percent of domestic freight tonnage, and trends showed the sector was heating up with the U.S. economy in the fourth quarter.

The American Trucking Associations (ATA) reports fourth-quarter 2017 tonnage of all truck freight, was up 3.7 percent from the previous quarter and 8.1 percent higher than the fourth quarter of 2016. Total tonnage for 2017 was up 3.8 percent from 2016, which was the biggest annual increase since 2013.

Diesel fuel rates in the fourth quarter were $2.87 per gallon, up 9 percent from the previous quarter and 16 percent above the fourth quarter of 2016.

Additionally, the USDA reported refrigerated fruit and vegetable shipments in the fourth quarter of 2017, at 7.72 million tons, were the third-highest on record.  The quarter trailed only the 2016 mark of 8.05 million tons and 7.99 million tons in 2011.

Total refrigerated fruit and vegetable shipments for all of 2017 were a record 33.6 million tons, up 0.5 percent from33.4 million tons in 2016.

Driver Shortage

The ATA estimates if current trends continue the driver shortage of 48,000 positions in 2015 could grow to 175,000 positions by 2025.

The electronic logging device mandate has been disruptive for many carriers, with many shipping point districts reporting shortages immediately after the December 18 ELD deadline.

Fourth-quarter fruit and vegetable truck rates of $2.55 per mile for routes from 500 to 1,500 miles were up 25 percent over year-ago levels, and rates of $2.52 per mile for routes of 1,500 miles to 2,500 miles were up 24 percent over the fourth quarter of 2016.

Coast-to-coast reefer truck rates on January 10th exceeded $10,000 per truck from several Western districts.  For example, January rates from Idaho to Miami were as high as $10,200 per truck, up from $6,800 the previous year.

Truck rates in late March were down from January historic highs, but were still higher than in 2017.

At Nogales, AZ, imported Mexican produce rates were in the $5,800 to $6,800 range to New York City on March 27, down from $6,000 to $7,000 on March 8 and well off the rates of $9,000 to $9,800 reported in mid-January.

March produce trucking rates were still above the same time a year ago, when trucks from Nogales to New York City were in the $5,000 to $5,200 range.

The next quarterly report will be issued in late May for refrigerated trucks hauling fresh produce.

Read more »

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

By |

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.


Read more »