Truck rates may force shipping cost load to shift - The Packer

Truck rates may force shipping cost load to shift

06/11/2004 12:00:00 AM
Terry Scruton


The U.S. Department of Agriculture’s Market News has reported truck shortages in Florida and along the East Coast, and California could get hit before long.

(June 11) From new hours-of-service regulations to soaring fuel costs to bankruptcies and consolidation, 2004 has already been a bumpy ride for the trucking industry.

Depending on whom you ask, the worst may be yet to come.

Ken Kodish, chief executive officer of Lionheart Group, Pompano Beach, Fla., said finding trucks to ship loads from Florida has been tough and costly this year and shows no signs of getting better, especially with the Fourth of July coming up soon.

“From where we sit, there are fewer trucks available for holiday markets this year than there were last year,” he said. “And last year there were fewer than the year before. If Memorial Day is any indication of what the Fourth of July is going to be like, it’s going to go from nasty to downright desperate.”

SHORTAGES

The U.S. Department of Agriculture’s Market News has reported truck shortages in Florida and along the East Coast, and California could get hit before long.

Freight rates in those areas are up significantly from last year. The USDA reported the week of June 6 that the cost of shipping a load of citrus from California to New York averaged $5,500, up from $4,900 — or 12.2% — a year ago. North Carolina sweet potatoes were $1,500 for a load to New York, up from $1,350 — or 11.1% — the year before.

And fuel costs are only adding to those woes. While diesel costs have dropped as much as 15 cents in recent weeks, the average national price was still at $1.73 as of June 7. That’s up 31 cents — or 21.8% — from the same week in 2003.

Some shippers, however, say that this is just business as usual for this time of year.

Kevin Sikorski, eastern vegetable sales manager for L&M Cos. Inc., Raleigh, N.C., said truck shortages are to be expected between Memorial Day and the Fourth of July.

“It’s not anything new to the business that trucks become very short in the spring,” he said. “I think this year with the increased fuel costs and a flurry of product, there was some more demand for trucks.”

Sikorski said, however, that business has slowed since Memorial Day, and now that volume from Florida and Georgia has lightened and North and South Carolina deals have begun, he said the Fourth of July shouldn’t be as much of a problem.


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