Produce in Full Swing
Spring is here. That means we’ve kicked off produce season.
What is produce season? It seems obvious, but the reality is, there are so many variations of fruits and vegetables that it makes it a little more complex. Add in the different types of weather and temperatures across the globe, and produce is technically moving year-round.
But…here we are, in peak season, which generally runs February through July. This is when the largest volume of fruits and vegetables are harvested and shipped to manufacturers, grocery stores and various other vendors across the country.
The real question this time of year: how does peak produce season impact truck rates?
I think we all know what happens when demand for trucks rises, right? If not, let us clarify. Capacity shrinks. It’s not the best ratio, but the number of trucks and drivers doesn’t change just because there is more volume. In addition to that, refrigerated trucks are in even higher demand, so the rate for reefers increases drastically this time of year.
That’s all great information, but what does the data tell us?
According to DAT, spot market freight rates rise over 30% in the spring, peaking toward the end of March. Because of this, carriers will intentionally position their trucks in the produce states- mostly southern states & California. This impacts shippers in other markets because they experience capacity shortages in their areas because more trucks are looking for the higher produce rates. This generally drives rates up for other equipment- vans, rail, LTL, etc.
How big is the increase? Spot rates (not including FSC), have increased by almost $1.00/mile in the last three months, per DAT. Comparing that to two years ago, rates have increased over 120% this time of year, averaging almost $5.00 per mile.
Let PGT Help
To try and combat higher prices, reach out to us. We can help with spot market rates with our preferred carriers, but we can also work together to put some contracted rates in place so you don’t feel such a dramatic price increase during peak season. And a big thing- put your focus on being that one shipper everyone loves. Have flexible shipping and receiving hours, driver-friendly facilities, and treat drivers like they will be handling your valuable freight…because, well, they are! By doing this, you will become a shipper that carriers will gravitate to and will be more willing to run at lower rates.