Fuel prices, truck availability weigh on shippers

06/10/2014 03:49:00 PM
Andy Nelson

HUDSONVILLE, Mich. — Fuel prices and truck availability continue to give Michigan grower-shippers headaches.

Input costs increase every year, but truck availability may be more of an issue than costs in 2014, said Todd DeWaard, sales manager for Superior Sales.

“You can pick it and pack it, but you have to find a ride,” DeWaard said. “It’s been a struggle as time has progressed. Transportation and labor are the top two battles we face.”

The proximity to markets often gives Michigan shippers an advantage over Western shippers when transportation costs are high, but that doesn’t mean shippers won’t face challenges this season, said Fred Leitz, principal of Sodus-based Leitz Farms LLC.

“It was hard last year, and I think it will continue to be hard,” Leitz said. “I don’t see it going below where it is now.”

Availability will also be an issue in 2014, he said.

“Companies will go where they can get the money. We got it done last year, but it was tough. You have to beat down their doors to find trucks.”

Freight rates were high in mid-May, but if history repeats itself, they should come off as Michigan growers starting ramping up summer production, said Talbert Nething of Byron Center-based Van Solkema Produce.

“Everybody hits the panic button around Mother’s Day when (freight prices) have their first jump, then they level off in June,” Nething said.

“They may be higher than last year, but they’ll level off.”

One challenge growers and shippers face with transportation costs, Nething said, is that costs can jump before retailers can raise their prices for fruits and vegetables.

Of course, for Michigan shippers, high transportation costs can play into their favor, Nething said, especially with the increasing support among retailers for locally grown produce.

The gap between costs to ship product from California or other distant growing areas and costs to ship much closer to home widens as costs increase.

Still, that’s no guarantee Midwestern and Eastern buyers will choose Michigan, Nething said.

Buyers who have contracted to buy produce from a specific growing area, no matter how far, will continue to buy it, no matter how high transportation costs get.



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