Posts Tagged “truck shortages”
Trucking 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.
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.
“Name me a city or a state and I will tell you trucks have been tight,” states Bob Rose of the Allen Lund Company LLC.
Rose should know. He is the manager of the firm’s San Francisco office and has been with the transportation and logistics company 31 years. Based in LaCanada, CA, Allen Lund Company has 34 offices nationwide, working with 21,000 trucking companies, providing it with a keen pulse of truck availability.
The last three quarters of 2017 rates have been stronger, reflecting increased demand for equipment.
Allen Lund Company moves about 90,000 loads a year with a significant portion of this being perishables.
Rose doesn’t expect truck availability to improve any the rest of the year, and points out holidays such as Thanksgiving (November 23rd) always means increased demand for fresh fruits and vegetables and refrigerated trucks.
The ethnic population in the U.S. also is a factor with higher volume and demand for equipment to deliver product for their holiday observances.
“Not everyone can haul produce,” says Rose, in reference to the extra demands and knowledge required of drivers hauling perishables.
He also expresses concerns over the looming electronic logging device (ELD) requirement mandate, which the Commercial Vehicle Safety Alliance will begin phasing in December 18th unless it is delayed, as many hope. Plans to start using out-of-service criteria connected with the ELD mandate begins April 1st.
While the large carriers and their trucking associations tend to support ELDs, owner operators and small fleets often view it as limiting their ability to provide superior service, increases their costs of operation, and being another rule limiting their freedom of choice as professional drivers.
“Not a lot of the large carriers are hauling produce,” observes Rose. “Most of it is transported by owner operators and small trucking companies.”
He believes the tight truck supplies are resulting primarily due to the industry being at or near full capacity.
“We talk a lot about truck shortages, but with ELDs, we will feel it. But no one yet knows how ELDs will be enforced,” Rose says.
As a result, he notes Allen Lund Company is looking for ways to reduce the costly delays too often found at loading and unloading docks. They also are seeking improved routes for trucking since customers are maintaining lower inventories and want faster deliveries.
“I want to figure out how to pay drivers more so they can truck less and still support their families,” Rose concludes.
In the Lower Rio Grande Valley of Texas, both grapefruit and oranges are moving in steady volume. Meanwhile, Mexican product is crossing the border at McAllen, Tx ranging from tropical fruit to tomatoes, and vegetables, with truck shortages reported. There’s also cabbage being loaded from the Winter Garden District just south of San Antonio. There also is light volume of West Texas potatoes being shipped out of the Hereford area and Eastern New Mexico.
South Texas produce shipments- grossing about $3100 to Orlando.
Wisconsin Potato Shipments
Central Wisconsin is the nation’s third largest potato shipping area and is averging about 200 truck loads weekly. Truck supplies are very tight.
Wisconsin potatoes – grossing about $3400 to Dallas.
Red River Valley Potato Shipments
Red potatoes out of the North Dakota/Minnesota Red River Valley are moving in steady volume. Truck supplies are very tight.
Red River Valley potatoes – grossing about $2000 to Chicago.
Colorado Potato Shipments
The second largest potato shipping state is Colorado. Truck supples are very tight for produce being shipped out of the San Luis Valley.
Colorado potatoes – grossing about $2400 to Chicago.
You know there’s a glut of potatoes available when you can go into your local supermarket and find a 10-pound bag of russets for $1.49, while a five-pound bag of the same spuds is selling for $2.47. That means plenty of potatoes for hauling this season. In fact, truck shortages are being reported in most of the major shipping areas, ranging from Idaho to Washington, Colorado and Wisconsin.
Idaho grows and ships about one-third of all U.S. potatoes each year. The state’s 2014 harvest, which recently completed, yielded about 13 billion pounds of potatoes from a little over 320,000 acres. That is enough potatoes to fill 500 football stadiums 10 feet high.
Idaho potato shipments should be pretty normal this season. Known for its russet potatoes, over the past decade, growers have diversified and now have an assortment of specialty potato varieties. The state is the number one shipper of fingerling potatoes, and Idaho is now the number two shipper of red potatoes.
Twin Falls, Idaho potatoes – grossing about $6000 to New York City.
U.S., Canada Potatoes
About 508 million cwt. of potatoes potentially will be shipped in the U.S. and Canada this season, 2 percent more than last season. U.S. fall production is estimated at 406 million cwt., Canadian production at 102 million cwt. The U.S. total is 3 percent higher than in Fall 2013. Canada’s production is down 1 percent. Production is up in the U.S. even though acreage is down. About 926,000 acres were harvested this fall, down from 934,000 acres last fall. Yields rose, however — from 425 cwt. to 439 cwt. per acre. Harvested acreage in Canada fell from 351,000 acres to 342,000 acres. Yields rose from 292 cwt. to 298 cwt. per acre.
San Luis Valley, Colorado potato shipments – grossing about $2700 to Atlanta.
Columbia Basin, Washington potato shipments – grossing about $3000 to Chicago.
Stevens Point, Wisconsin potato shipments – grossing about $3400 to Dallas.
The Polk Commercial Vehicle Report for 2012 reports a 23 percent increase in the number of new commercial truck registrations for new commerical trucks compared to the previous year. 2011 registrations for Class 3 through Class 8 trucks was 461,000. However, the record for new truck registrations occurred in 2006 when the total hit 800,000.
Between 1985 and 2011 there were 507,000 new truck registrations each year on average.
Class 8 trucks led the new commerical vehicle registrations in 2011 with a 38 percent increase, compared to 2010.
When you combine the new and used registrations, the figure exceeds 1.25 million, which is up 20 percent compared to 2010.
Will this mean fewer truck shortages in 2012 at major U.S. produce shipping areas? This remains to be seen. If trucking companies registering all these trucks have drivers to cover this equipment, sure it’s a no brainer.