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Transportation costs will remain high for years, experts say

The market dynamics that have led to higher transportation costs were a long time coming and won’t quickly be solved.

Industry leaders discussed some strategies to deal with the problems during a United Fresh BB #:145458 Reimagine webinar on the future of transportation June 18.

“We project this is a multiyear problem, probably 48 months or longer,” said Todd Bernitt, Vice President – Managed Services for Robinson Fresh BB #:100586.

“The driver pool problem may take a decade or longer to play out,” he said about the driver shortage.

He said a normal load-to-truck ration should be 2.5 or 3 loads per truck. Now it’s about 8-1.

“We’ve seen peaks I’ve never seen before,” Bernitt said, citing 30-1 ratios from Florida this spring and 40-1 from Texas during the winter storms earlier this year.

“All of this is market based,” said Brian Kocher, President and CEO of Castellini Company LLC BB #:102397. “All of this fits together. Regional growing will change the strategy, as with urban, greenhouses and vertical farms. We’re building as much flexibility as we can and advise our partners to do that.”

One simple solution to improving driver retention is to treat drivers and transportation companies better, said Jeff Moore, Vice President of Sales for Tom Lange Company Inc. BB #:102175

“Treat carriers like your best supplier or your best customer,” Bernitt said.

Ed Fitzgerald, Sr. Director, Trade Services for GEODIS said ocean freight is seeing a similar combination of issues leading to more demand than supply, which should last the rest of this year and into 2022.

Another solution is a greater investment in technology, the panel said.

“I think technology will be the difference maker in the next 10 years,” Kocher said. “You have to test it and see the limitations or the industry will pass you by. We will see our workforce be more data and analytic oriented.”

Bernitt said Robinson Fresh went from having about 50 data scientists on staff before the pandemic to 250 now.

As for driverless trucks and drones helping the produce industry, the panel said not to count on relief any time soon.

“The problem is that our product is difficult to haul,” Bernitt said. “The start of it will be simpler freight. We’re a long way off.”

Greg Johnson is Director of Media Development for Blue Book Services