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Truck rates rising with availability crunch

Truck rates for perishables are on the rise thanks to a confluence of many issues.

Noah Hoffman, vice president for global logistics platform for C. H. Robinson Worldwide, Inc. BB #:100586 Eden Prairie, MN, said this time last year, there were about eight loads for every refrigerated truck, and now that ratio is about 19-1.

He said the pandemic and lockdowns last spring suppressed and changed consumer demand, but now things are getting back to normal, with more demand for fresh fruits, vegetables and flowers.

The floral industry, of which about 90 percent of flowers for U.S. markets come through Miami, is causing extra truck supply problems with the lead up to Mother’s Day, May 9, Hoffman said.

Not only that, but there are regional lockdowns, especially in Canada, and things such as International Roadcheck, an annual three-day event May 4-6 of heavier inspections in the three USMCA countries, which suppresses truck and driver supply.

“The system is out of balance, and it should be for the next few quarters,” he said.

Weather problems earlier this year have caused the Southeast season to start slower than normal, he said, but it’s ramping up quickly now.

“You get a pulse in the Southeast, and it’s a signal for what’s coming,” from other regions, such as Texas, California and the Midwest later in the summer, he said.

What’s coming, Hoffman said, is higher prices and tighter truck supply this summer.

As a transportation company, that’s not all bad news.

“If you don’t have obligations, this is a beneficial market,” he said.

He added that Robinson’s temperature controlled shipping division helps customers with solutions for complex supply chain issues, and the company has 1.6 million square feet of dry warehouse space and 3.5 million of temperature controlled warehouse space throughout the country.

USDA’s weekly truck rate report shows shortages on availability from most growing regions, with prices rising from many regions and not falling from any.

Greg Johnson is Director of Media Development for Blue Book Services