Produce Hauling Rates

Trucking rates have been sky-high lately, which is disrupting many supply chains. Most company’s are trying to figure what the new standard is and when will it return to normal. Unfortunately, with so many new variables at play, it is hard to see where the end is. Fortunately, we can plan ahead to act accordingly. This will minimize any issues, surprises and delays that are harming your supply chain. Now, let’s look into a few key issues as to why trucking rates are so high.

Why Rates Have Been So High

There are three main reasons, or contributing factors, as to why the rates have jumped up so high. These are Capacity, Volume and Covid19. They all tie into one another, but we are going to try and touch on the specifics with each category.

Capacity

The entire freight industry went through a small recession last year. With this, rates were below average for most trucking companies, which put stress on their pocket books. A lot of carriers had to make the decision to close their doors and turn in their keys as they were not able to make ends meet. This helped to stabilize the demand for trucks with the supply of loads. That means we were at equilibrium during recession volumes. If things were to normalize, we would have a shortage of trucks and rates would naturally rise.

Volumes

Volumes went from being below average at the beginning of the year to all time highs in June, July and August. Mixing high volumes with less trucks created the perfect storm for hyper-inflation with trucking rates. Essentially, shippers had to bid for trucks since there were not enough to take all their loads. Normally, we see the opposite. This begs the question: Why did volumes jump so high?

Covid19

This Virus has impacted everything from our personal lives to the overall economy. It is not a shock that it played a role in the rising transportation costs this year. According to our data, the coronavirus caused a jump in volume that has held steady since March. We speculate that this is due to the threat of being closed/locked down. Shippers are trying to get their goods out the door because they are uncertain about the near future. What is surprising is how these volumes have held constant from March until now (August). A combination of imports, consumer consumption, and uncertainty have played a major role in keeping rates high and relatively stable.

Where are the Rates?

Rates are all over the place. They change based on location, distance, capacity, population density, weather, and many other smaller factors. Here is a short explanation on how Distance, Location and Capacity impact shipping rates:

Distance is a very important factor in price. Coast-to-coast shipments are cheaper per mile than local runs. It is important to remember, whether you are going a long way or running 50 miles down the road, you will still be paying for the drivers time.

Location is another factor that impacts the price. We get a lot of shipments that pick up in Wyoming, Colorado, Utah, and other states that do not have a very dense population. This can cause the rate to come up because drivers tend to be situated around bigger cities where loads are most likely to appear. We would essentially have to pay them to drive out and get the shipment (deadhead). This rule also applies to deliveries in remote areas. If you are 200+ miles away from a major city, be prepared to pay a little more than the usual rate.

Capacity is the final constraint to consider/understand. Drivers are constantly moving all over the country. When you have a surplus in one city, then the price goes down. The drivers will compete for loads. If you have a shortage of drivers in a city, then the price goes up because the driver will have their pick of the lot. The highest paying freight will be moved first.

Live Rates

Rates below come directly from the USDA where you will see the shipping location at the top, where it is going to, and low and high rates.

This is the data from the USDA. Source: https://www.ams.usda.gov/mnreports/fvwtrk.pdf

UPPER VALLEY, TWIN FALLS-BURLEY DISTRICT IDAHO
— POTATOES ADEQUATE —
ATLANTA 4250 4675
BALTIMORE 5100 5525
BOSTON 5525 6163 5525 5950
CHICAGO 3188 3400
DALLAS 3000 3613
LOS ANGELES 1500 1806
MIAMI 5631 6375
NEW YORK 5525 5950
PHILADELPHIA 5100 5525


IDAHO AND MALHEUR COUNTY, OREGON
— ONIONS ADEQUATE – FIRST REPORT —
ATLANTA 4463 4675
BALTIMORE 5525 5950
CHICAGO 3400 4038
DALLAS 3400 4038
LOS ANGELES 1063 1488
MIAMI 5525 5950
NEW YORK 5950 6375
PHILADELPHIA 5313 5950


SOUTHWEST INDIANA AND SOUTHEAST ILLINOIS
— MELONS SHORTAGE —
CHICAGO 1100 1400 1200 1300 (-19)


MICHIGAN
— CUCUMBERS ADEQUATE —
ATLANTA 2400 2500 (0)
BALTIMORE 2500 2600 (0)
CHICAGO 900 1000 (0)
DALLAS 2700 2800 (0)
NEW YORK 3000 3100 (0)
PHILADELPHIA 2700 2800 (0)


SOUTHEAST MISSOURI
— MELONS SHORTAGE —
CHICAGO 1500 1600 (+15)


MISSISSIPPI
— SWEET POTATOES ADEQUATE —
ATLANTA 1200 1600 (0)
CHICAGO 1500 2000 1800 (0)
DALLAS 1600 2000 1800 (0)
EASTERN NORTH CAROLINA


— SWEET POTATOES ADEQUATE —
ATLANTA 2500 (0)
BALTIMORE 2000 (0)
BOSTON 3000 3500 (0)
CHICAGO 3000 (0)
MIAMI 2500 (0)
NEW YORK 2500 (0)
PHILADELPHIA 2250 (0)


NORTH CAROLINA
— MELONS SHORTAGE —
ATLANTA 1300 1600 1300 1500 (-7)
BALTIMORE 1500 1800 1500 1600 (-6)
BOSTON 2800 3000 (0)
CHICAGO 1800 2000 1800 (-12)
NEW YORK 2200 2600 2200 2400 (-2)
PHILADELPHIA 1600 (-9)


SOUTHERN NEW MEXICO
— ONIONS SLIGHT SHORTAGE – LAST REPORT —
ATLANTA 3400 3825 (0)
BALTIMORE 4250 4675 (0)
BOSTON 5100 5525 (0)
CHICAGO 2763 3528 (0)
DALLAS 1275 1913 (0)
PHILADELPHIA 4250 4888 (0)


MEXICO CROSSINGS THROUGH TEXAS
— LIMES MANGOS TOMATOES BROCCOLI MIXED FRUITS
AND VEGETABLES ADEQUATE —
ATLANTA 2600 2700 (-2)
BALTIMORE 4000 4300 (-1)
BOSTON 4600 4800 (-7)
CHICAGO 2800 3000 (+2)
DALLAS 1400 1500 (0)
LOS ANGELES 2500 2800 (0)
MIAMI 4200 4500 (+12)
NEW YORK 4600 4800 (-4)
PHILADELPHIA 4200 4400 (-1)
SEATTLE 4700 5000 (0)


TEXAS
— WATERMELONS, ONIONS ADEQUATE —
ATLANTA 2600 2700 (-2)
BALTIMORE 4000 4300 (-1)
BOSTON 4600 4800 (-7)
CHICAGO 2800 3000 (+2)
DALLAS 1400 1500 (0)
LOS ANGELES 2500 2800 (0)
MIAMI 4200 4500 (+12)
NEW YORK 4600 4800 (-4)
PHILADELPHIA 4200 4400 (-1)
SEATTLE 4700 5000 (0)


COLUMBIA BASIN WASHINGTON
— POTATOES AND ONIONS ADEQUATE —
ATLANTA 5600 6400
CHICAGO 4500 4800
DALLAS 3900 4250
LOS ANGELES 2300 2400


KERN DISTRICT CALIFORNIA
— CARROTS AND GRAPES ADEQUATE —
ATLANTA 6000 6400 (+2)
BALTIMORE 7500 7700 (+3)
BOSTON 7800 8300 (+3)
CHICAGO 5400 5900 (+4)
DALLAS 4300 4400 (+2)
MIAMI 7500 7900 (+3)
NEW YORK 7600 8100 (+3)
PHILADELPHIA 7500 8000 (+3)


NORTHERN CALIF INCL SAN JOAQUIN VALLEY
— PEARS ADEQUATE —
ATLANTA 6447 7000 (+11)
BALTIMORE 7236 8000 (+8)
BOSTON 7970 9000 (+6)
CHICAGO 5250 6500 (+21)
DALLAS 4419 5000 (+13)
MIAMI 7417 8500 (+7)
NEW YORK 7514 8500 (+7)
PHILADELPHIA 7299 8200 (+11)


SALINAS-WATSONVILLE CALIFORNIA
— BERRIES, BROCCOLI, CAULIFLOWER, CELERY, LETTUCE,
ROMAINE AND LEAF LETTUCE ADEQUATE —
ATLANTA 6600 7000 (+1)
BALTIMORE 7700 8400 8100 8300 (+3)
BOSTON 8400 8900 (+2)
CHICAGO 5900 6200 (+3)
DALLAS 4700 4800 (+2)
MIAMI 7900 8300 (+3)
NEW YORK 7700 8700 8200 8700 (+2)
PHILADELPHIA 7600 8600 8100 8600 (+2)


SAN JOAQUIN VALLEY CALIFORNIA
— ONIONS ADEQUATE – LAST REPORT —
ATLANTA 4675 (0)
BALTIMORE 5738 6300 (0)
BOSTON 6700 (0)
CHICAGO 3825 4700 (0)
NEW YORK 5738 6300 (0)
PHILADELPHIA 5738 6300 (0)


SAN JOAQUIN VALLEY CALIFORNIA
— PEACHES, NECTARINES, PLUMS, GRAPES SLIGHT
SHORTAGE —
ATLANTA 5800 6300 (-2)
BALTIMORE 7000 7600 (0)
BOSTON 7500 8100 (0)
CHICAGO 5400 5800 (-1)
DALLAS 4400 5100 (-1)
MIAMI 7300 8000 (+1)
NEW YORK 7500 8000 (0)


SANTA MARIA CALIFORNIA
— BROCCOLI, CAULIFLOWER, CELERY, LETTUCE,
ROMAINE, LEAF LETTUCE AND STRAWBERRIES
ADEQUATE —
ATLANTA 6400 6800 (+2)
BALTIMORE 7900 8100 (+3)
BOSTON 8200 8700 (+2)
CHICAGO 5700 6200 (+2)
DALLAS 4600 4700 (+2)
MIAMI 7700 8100 (+3)
NEW YORK 8000 8500 (+2)
PHILADELPHIA 7900 8400 (+3)


SOUTH DISTRICT CALIFORNIA
— CITRUS, AVOCADOS SLIGHT SHORTAGE —
ATLANTA 5900 6500 6000 6300 (+3)
BALTIMORE 7100 7800 7300 7700 (+3)
BOSTON 7800 8400 8000 8400 (+6)
CHICAGO 5600 6400 5700 6100 (+4)
DALLAS 4400 5500 4500 4900 (-1)
MIAMI 7500 8400 7600 8000 (+1)
NEW YORK 7700 8400 7900 8300 (+5)
PHILADELPHIA 7500 8200 7600 8000 (+3)
SEATTLE 2750 3400 (0)


SAN LUIS VALLEY COLORADO
— POTATOES ADEQUATE – LAST REPORT —
ATLANTA 2946 3225 (0)
BALTIMORE 3825 4300 (0)
BOSTON 4085 4515 (0)
CHICAGO 2150 2580 (0)
DALLAS 1720 2043 (0)
LOS ANGELES 1720 2125 (0)
MIAMI 4250 5160 4675 (0)
NEW YORK 4144 4623 4250 4500 (0)
PHILADELPHIA 3825 4515 (0)


DELAWARE, MARYLAND AND EASTERN SHORE
VIRGINIA
— MELONS SHORTAGE —
ATLANTA 1800 2000 (-10)
BALTIMORE 1000 (0)
BOSTON 2000 (-9)
CHICAGO 1500 1600 (-9)
NEW YORK 1400 (-13)
PHILADELPHIA 1100 (-8)

 

Conclusion

Produce hauling rates are abnormally high, but if you plan ahead, then you might have a better chance at securing a truck at a moderate rate (when compared to industry averages).

If you have any questions or would like to get trucks lined up, Fide Freight will be more than happy to take that call. We are available when you need us and will work for you, not your money.

 

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Jon Wilcox

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