As 2019 gave way to 2020, a squeeze on trucks appeared to be easing, but plenty of questions still hovered over the transportation sector as the new year progressed, suppliers said.
“Capacity became tight in December and carried over through the first two weeks of January, but now has loosened up considerably the past several days,” Rob Likens, CEO of Indianapolis-based Hoosier Logistics, said Jan. 21.
Industry colleagues in the same area have voiced similar appraisals, Likens said.
Truck capacity could shrink as 2020 unfolds, however, Likens said.
“With operational costs for carriers increasing — labor, insurance, equipment, technology — and customers being very price-conscious, this may cause a significant downturn in available capacity,” he said.
Those costs are putting a squeeze on trucking firms, Likens said.
“As we have seen over the past few months and preliminary fourth-quarter results, many trucking companies are finding it difficult to turn a profit,” he said.
For produce grower-shippers, communication with logistics providers is becoming more crucial, said Mark Petersen, vice president of temperature-controlled transportation with Eden Prairie, Minn.-based C.H. Robinson Inc.
“In the current market, it’s more important than ever to over-communicate roles, timelines and expectations with carriers,” Petersen said.
It also is a critical time for produce shippers to review logistics and transportation to reduce waste and “dwell time” in advance “to help the perception of produce” to the carrier community, Petersen said.
As production heats up with the spring weather across the U.S., truck supplies likely will tighten, said Kerry Byrne, president of Cincinnati-based Total Quality Logistics.
“While the market right now is loose, as the year progresses capacity could tighten, presenting produce shippers with some challenges, especially in the Midwest and Northeast,” Byrne said.
For the short term, however, there were ample supplies of vehicles to handle needs, Byrne said.
“We’re anticipating a loose market for the first half of the year, which would allow produce shippers to focus more on carrier expertise and performance and less on capacity concerns,” he said.
Other logistics issues remain unresolved, said John Hollay, senior director of government relations with the Washington, D.C.-based United Fresh Produce Association. Among the priorities are infrastructure and hours of service, he said.
“United Fresh is continuing to work with industry allies to advance a legislative package that will make significant investments in critical areas like port infrastructure and the funding of upgrades to our bridge and highway system to ensure the safety of and timeliness of delivery of perishable produce,” Hollay said. “This will be a challenge, given that it is a presidential election year, but both Democrats and Republicans — particularly those who have what are perceived to be in tough races — continue to point to transportation and infrastructure as one of the areas where they feel they can work in bipartisan, bicameral fashion to advance legislation.”
The industry also has been waiting for final hours of service regulations that better reflect the challenges produce shippers face, Hollay said.
“Regardless of whether Congress can pass legislation, the release of these updated regulations is imperative to the success of our members,” he said.