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Truckload freight volumes hit new highs in June and spot and contract rates stayed in record territory as surging retail imports and peak produce shipments fueled demand for transportation services, according to DAT Freight & Analytics, operator of the largest truckload freight marketplace in North America.
The DAT Truckload Volume Index was 237 in June, an 11% increase compared to May and a record high. The Index is an aggregated measure of dry van, refrigerated (“reefer”) and flatbed loads moved by truckload carriers and an industry-standard indicator of commercial freight activity. A baseline of 100 reflects freight volume in January 2015.
Super High Rates
The national average rate for van loads on the DAT One load board network was $2.68 per mile in June, down 1 cent from the all-time high in May (all rates include a fuel surcharge).
The national average spot rate for refrigerated freight fell 1 cent to $3.10 per mile month over month while the flatbed rate increased 3 cents to $3.15.
Contract truckload rates set records for all three equipment types. The average van rate was $2.73 per mile, up 6 cents compared to May. The contract reefer rate increased 3 cents to $2.88 per mile, while the flatbed rate jumped 7 cents to $3.10 per mile.
Spot load postings decline as more freight moves under contract.
Overall truckload volumes increased last month but the number of loads posted to the DAT One network fell 6.0% compared to May. This marked a shift from the spot market toward more freight moving under contract or other means.
The number of available trucks on DAT One increased 13.2% compared to May. Although capacity remains tight, there are signs that workers are coming back to the industry, with 24,500 new transportation jobs added in June.
With fewer loads on the spot market and more trucks available, load-to-truck ratios declined for all three equipment types. The national average van ratio was 5.6 in June, meaning there were 5.6 available loads for every van posted to the DAT network, down from 6.1 in May. The reefer ratio was 11.6, down from 13.0, and the flatbed ratio slipped from 97.1 in May to 66.8 last month.
In June, shippers faced a supply-driven capacity crunch, said Ken Adamo, Chief of Analytics at DAT: “While the number of trucks posted to the DAT load board network increased significantly in June, overall demand accelerated at a faster pace. The typical seasonal decline in contract and spot rates from now to Thanksgiving looks less likely in 2021.”
Spot truckload rates typically drop after the July 4 holiday with back-to-school and back-to-office retail goods already positioned and produce season past its peak. In some cases, reefer carriers will shift to moving dry van and other types of freight, which could provide relief to retailers seeking transportation services for end-of-year holiday goods.
Usually, 12 to 15% of all truckload volume moves on the spot market. Entering July, that figure is closer to 25% but should tighten as more shippers take a portfolio-based transportation procurement strategy (dedicated, contract and spot, as well as using a mix of both asset and non-asset providers).
Between July 4 and Thanksgiving, weekly truckload volumes of produce typically decline an average of 21%, which translates to reefer carriers hauling 7,300 fewer truckloads per week by the end of November.
Comparing rates entering the market to those exiting shipper routing guides, contract rates were rising at the beginning of July: new routing guide contract rates increased by 7% in the two weeks ending July 1 compared to the prior two-week period. We expect contract rates to remain elevated at least through the fall.
In an effort to speed delivery and meet increasing consumer demand to have goods delivered to their doorstep, Walmart is strengthening its partnership with the on-demand drone delivery startup DroneUp.
Walmart first partnered with DroneUp — operator of small Unmanned Aircraft Systems (sUAS) — in 2020 and launched a pilot program to deliver at-home COVID-19 self-collection kits.
“The trial demonstrated we could offer customers delivery in minutes versus hours. Now, after safely completing hundreds of drone deliveries from Walmart stores, we’re making an investment in DroneUp to continue our work toward developing a scalable last-mile delivery solution, John Furner, CEO and president of Walmart U.S., said in a recent press release.
Furner said Walmart is “uniquely positioned” to advance drone deliveries because of the retailer’s expansive footprint — over 4,700 stores nationwide — plus, 90 percent of the population lives within 10 miles of a Walmart location.
He said Walmart’s investment in DroneUp will apply to flying and ground delivery. The first official operation is being launched at a Walmart store in Bentonville, Arkansas.
“Conducting drone deliveries at scale is within reach. DroneUp’s expertise combined with our retail footprint and proven history of logistics innovation puts us right where we want to be for that day. Because when it comes to the future of drone delivery, we know the sky’s the limit,” Furner said in the post.
DroneUp was the first operator to use the FAA 107.39 waiver, which allows delivery flights to take place over people and moving vehicles. The Virginia startup is an authorized government drone services provider and operates commercially nationwide and for 11 states serving public sector agencies.
Walmart isn’t the only company looking for alternative means of handling fast deliveries. Amazon is planning to launch its own unmanned aerial vehicle (UAV) fleet and Google’s Wing UAV service recently piloted an operation during the pandemic lockdown and delivered books to school children.
By INDUSTRY PRESS RELEASE July 23, 2021
Bridges Produce has built their business on long term partnerships and their relationship with Fruit d’Or is no exception. The Bridges team has worked with Fruit d’Or, for over 24 years and has acted as their exclusive organic fresh cranberry sales representative in the United States for the last 7 years. During this time, they have seen the program grow and diversify across many markets and distribution channels. This Fall, Bridges will be adding Massachusetts based Decas Farms conventional fresh cranberries to their available offerings.
In March 2021, family-owned Fruit d’Or based in Quebec, Canada acquired Decas Cranberry Products Inc. The Patience Fruit & Co organic brand is well-developed in Canada and is a strong organic player in the US cranberry market. Decas Farms has an 80 year history of producing high quality fresh cranberries and cranberry products.
There continues to be opportunities for significant growth across the fresh cranberry category which grew over 4.1% in 2020. Bridges will be able to offer both 8oz. and 12 oz. Patience Fruit & Co. brand organic cranberries and 12 oz. Decas Farms brand conventional cranberries from October through December shipping from three locations – Carver MA, Los Angeles, CA, and Vineland, NJ.
With Decas Farms now under the Patience Fruit & Co’s umbrella, they plan to pack and ship the majority of the organic and conventional fresh fruit at the Decas’ Massachusetts facility. “Bridges is excited to add a Massachusetts based packing house and the additional SKU’s in the Decas Farms label. The combination of Patience and Decas has greatly increased our capacity and efficiency of logistics. We can now cover the full cranberry category with both organic and conventional options with three loading locations in the US,” said Ben Johnson, Bridges Produce’s President. With these increased efficiencies, and hundreds of years of combined experience Bridges expects to provide even higher levels of customer service paired with the superior quality fruit that all three companies are known for.
A record volume of 3.4 million metric tons (MT) of table grapes was traded in the 2020-21 season despite “multiple hurdles”, according to a USDA report.
At the world level, the pandemic doesn’t appear to have limited output as losses by some producer countries are being offset by gains in others, keeping production at 24.7 million MT, just below the record level set in 2017-18, the report said.
In addition, if forecasts are realized, this year could also mark the first time Peru surpasses Chile in production.
“Global trade has faced many challenges this past year due to COVID‐19 and its many effects. Agriculture as a whole has had to overcome, and continues to be confronted with, significant transportation challenges as part of the fallout from COVID‐19,” the USDA Foreign Agricultural Service (FAS) report on World Markets and Trade said.
“Included in these are worldwide shipping delays and container shortages, with resultant high shipping costs, while countries also face labor shortages to varying degrees due to COVID‐19 measures.
“Table grapes experienced further obstacles the latter half of the season that made the year even more trying.”
The report noted that in Peru, striking workers blocked roads and shipments in Ica in December, hitting growers in the top producing region during the Andrean country’s second-largest export month.
Additionally, in the midst of Chile’s harvest in January, unseasonal and torrential rain caused severe damage in three of the main growing regions, it said. Producer associations in O’Higgins, the largest producing region, reported losses of up to 80 percent.
And in March, the cargo ship Ever Given ran aground and blocked the Suez Canal, impacting India’s exports destined for Europe at the peak of its shipping season.
But the report noted that there is also “no relief expected from lower volumes”, with production levels remaining high.
“Adequate supplies are often being met with logistical challenges in getting fruit to import markets, but most major exporters have been able to reach markets, with some even expanding their reach to new destinations. Chile, the United States, and Mexico are the only top producer‐exporters anticipated to see reduced shipments, but mostly due to lower supplies,” it said.
“Despite the litany of challenges, the table grape industry has shown great resilience. With steady high volumes, imports and exports are each projected to reach a record of more than 3.4 million tons.”
The U.S. trucker shortage has become so severe companies are trying to recruit drivers from abroad more than ever.
The American Journal of Transportation reports the country has been struggling with a chronic lack of drivers for years, but the shortage reached crisis levels due to the pandemic.
Covid-19 simultaneously sent demand for shipped goods soaring while touching off a surge in early retirements.
Filling stations are facing gasoline outages, airports are short on jet fuel and lumber prices hit records with some suppliers partly blaming delivery delays.
Trucking has emerged as one of the most acute bottlenecks in the supply chain that has been hit quite hard amid the pandemic.
“We’re living through the worst driver shortage that we’ve seen in recent history, by far,” Jose Gomez-Urquiza, the chief executive officer of Visa Solutions told ajot.
As a result, demand for Visa Solutions’ services from the trucking industry has more than doubled since before the pandemic, and “this is 100% because of the driver shortage,” he said.
In July, a roundtable meeting was held with the trucking industry to discuss efforts to improve driver retention and reduce turnover.
Among the measures the industry is seeking is lowering the minimum age to 18 from 21 for interstate drivers and adding trucking to the list of industries that can bypass some of the Department of Labor’s immigration certification process.
Last year’s lockdowns also made it harder for new drivers to access commercial-trucking schools and get licensed.
Companies have offered higher wages, signing bonuses and increased benefits however, their efforts haven’t done enough to attract domestic workers to the industry.
In 2019, the U.S. was already short 60,000 drivers, according to the American Trucking Associations and that number is anticipated to swell to 100,000 by 2023, according to Bob Costello, chief economist Petroleum Marketing Group.
He also pointed out that there’s also a capacity shortage, or an unusually small number of trucks on the road, at the same time that demand has surged, he said.
“Even if there were drivers, there is a finite number of trucks at any moment in time, so you have two issues happening at once,” Fuller said.
Global food import costs are expected to rise 12% in 2021 to a record due to surging commodity prices and robust demand during the COVID-19 crisis, the United Nations food agency said.
The world’s food import bill, including shipping costs, is projected to reach $1.715 trillion this year, from $1.530 trillion in 2020, the Food and Agriculture Organization (FAO) said in its twice-yearly Food Outlook report on Thursday.
Growth in agricultural trade during the pandemic showed the inelastic nature of food consumption and the resilience of international markets, but price rises since late 2020 were raising risks for poorer import-reliant countries, the FAO said.
Its monthly food price index hit a 10-year high in May, reflecting sharp gains for cereals, vegetable oils and sugar, Reuters reports.
The FAO said a separate index of food import values, including freight costs that have also soared, reached a record in March this year, surpassing levels seen during previous food price spikes in 2006-2008 and 2010-2012.
A strong volume increase for staple food imports last year had already driven up global import costs 3% to a record.
Exceptions were beverages and fish products that are more sensitive to economic conditions and which saw demand curbed by supply chain difficulties, the FAO said.
The world’s heaviest mango has recently been found in Colombia, weighing in at 4.24 kilograms or 9.36 pounds and was certified as an official Guinness World Records title.
Colombian farmers, Germán Orlando Novoa Barrera and Reina Maria Marroquín managed to break a record after growing the mango in Guayatá, on the San Martín farm in the Boyacá area, according to the Guinness World Records website.
The previous record was held by a mango found in the Philippines that weighed 3.435 kilograms or 7.57 pounds in 2009.
“Our goal with this Guinness World Records title is to show to the world that in Colombia we are humble, hardworking people who love the countryside and that the land that is cultivated with love produces great fruits,” Germán was reported as saying.
“It is an award and a recognition of the effort and dedication to the Guayatuno countryside, and the love for nature that our parents passed down to us,” he also was reported saying.
After being documented for the record, the family celebrated by sharing and eating the entire mango.
The family said it was delicious though they made a mold out of it to make a replica and donate it to the city to be recorded for historical purposes.
California is a big force in the U.S. onion market.
According to a report from University of California, Davis, California is the largest onion producer (including fresh and processed) in the U.S. and is the only state to produce both spring and summer-harvested onions.
In 2015, the report said California produced 31% of the nation’s total onion crop.
About 16% of California onions are spring harvested, and the state produces 42% of the nation’s spring harvested onion crop.
About half of California onions are grown for the fresh market, and about half for processing, according to the report.
The proportion of spring, summer, fresh and processing onions tends to be stable, according to the report.
Onions are grown throughout California.
In a recent census, the counties with the top onion acreage were Fresno, Imperial, Kern, Siskiyou, and San Joaquin, with over a third of the state’s acreage located in Fresno County, according to the report.
The high desert region of Antelope Valley in Los Angeles County and the Salinas Valley also include some fresh market onion acreage, the report said.
In 2020, truck onion shipments from California’s Central Valley totaled 339.9 million pounds, up 2% from 33 million pounds in 2019 and up 12% from 304.8 million pounds in 2015. Shipments were recorded in every month in 2020 from California’s Central Valley, with peak shipments in June, July and August.
In 2019, shipments of California’s Central Valley onion truck shipments accounted for 7.5% of total U.S. onion truck volume. That was up slightly from 7.4% in 2019 and down slightly from 7.7% of total U.S. onion truck shipments in 2015.
Truck onion shipments from California’s Imperial Valley totaled 144.9 million pounds in 2020, up 5% from 138 million pounds in 2019 and up 22% from 119.1 million pounds in 2015. May was the peak onion shipment month for California’s Imperial Valley, with shipments starting in May and ending in June.
In the season-to-date truck shipment report through May 15 this year, the U.S. Department of Agriculture reported 66.8 million pounds shipped, down slightly from 68.1 million pounds the same time a year ago.
Imperial Valley onion shipments accounted for 3.2% of total U.S. onion truck shipments, up from 2.9% in 2019 and 3% in 2015.
Southern California’s onion truck shipments in 2020 totaled 16.1 million pounds, down 43% compared with 27.9 million pounds in 2019 and down 85% from 110.5 million pounds in 2015.
Truck shipments from the region were active from January through May, with peak shipments in January. Southern California onion truck shipments accounted for 0.3% of total U.S. onion truck shipments, down from 0.6% in 2019 and lower than 2.8% in 2015, according to the USDA.
Hemp is getting a lot of attention from growers in Florida.
The Sunshine state started issuing licenses for growing hemp in April 2020, and by February 2021 there were 35,000 acres registered, with $270 million in income projected for the coming year, according to WCJB News in Gainesville.
Within the next few years, hemp farming in Florida is projected to grow to about half the size of the state’s citrus industry,” writes Regan McCarthy on the website of Miami’s WFSU Public Media, part of Florida State University. “Much of that growth is driven by CBD production.”
McCarthy quotes Florida agricultural commissioner Nikki Fried, who said, “At this moment Florida has 22,078 licensed acres of hemp cultivation after just seven months.
This acreage is very similar to three of Florida’s key crops—tomatoes, watermelon, and snap peas—and is double of what the state has in production for strawberries. (Note that acreage rose from 22,078 to 35,000 in about a month.)
In many cases, hemp has replaced permanent crops in Florida, including citrus and blueberries.
“We’re talking about citrus groves that weren’t producing,” says Florida cannabis director Holly Bell, “so those are being dug up and the land is being repurposed to bring in revenue and create new jobs.”
Some blueberry growers who were struggling as a result of increased competition from Mexico have also turned to hemp.
Hemp has an enormous number of uses, such as for textiles and even for paper, but markets are limited by a lack of facilities for producing these products.
“Textiles and fiber can be made from the pith,” says Frederick Schilling, a partner in Klersun, LLC, a company that specializes in hemp-derived extracts.
“That will eventually increase once the infrastructure is built out to support those products.”
He foresees this occurring in three to five years.
Infrastructure will, in part, determine the future of the cannabis industry. So will legislation. The third factor is business acumen and integrity.
“As with any emergent industry, there were bad actors doing things that were giving the industry a bad name,” says Chris Bourne, Schilling’s partner. “Fortunately, a lot of those folks have been weeded out.”
Some analysts also believe the industry has lost much of its “wildcat” mentality and is now more comparable to mature packaged-goods companies.
Possibly the most modern wholesale produce market in the U.S., the Philadelphia Wholesale Produce Market recently celebrated 10 years in business.
In 2011, the market opened the doors at 6700 Essington Ave., welcoming buyers to its fully enclosed, fully refrigerated 686,000-square-foot facility, according to a news release.
The market is home to 19 wholesale produce businesses that employ hundreds of people in both union and non-union positions and donate more than 2 million pounds of fresh produce to local charities every year.
“We are proud to pave the way as a leader in cold chain management, product safety, staging, loading, security and recycling,” market general manager Mark Smith said in the release. “In addition to establishing the highest global standards for distributing produce, our goal is to divert as much waste from the landfill as we possibly can. Through anaerobic digestion and other environmentally friendly practices, we’ve reduced our waste stream by about 80% and continue to focus on that last 20%.”
Three market business leaders weighed in on what the market means to them:
- Tracie Levin, general manager of M. Levin & Co. Inc.:
“We couldn’t have asked for a better facility to showcase our produce. The bright, clean (and of course ‘cool’) and spacious market that has become our home has been great for the merchants and all of the customers who shop at the PWPM.”