( File photo )

Truck rates have fallen from the historic marks reached earlier this summer but remain well above 2017 levels.

Costs to transport Mexican citrus, watermelons and vegetables crossing in Texas and headed to Boston decreased from $7,800-8,500 in mid-June to $5,800-6,200 in mid-July to $4,800-5,000 in mid-August, according to U.S. Department of Agriculture data.

Costs to transport California commodities including lettuce and strawberries from the Salinas-Watsonville area to Baltimore fell from $9,100-10,000 in mid-June to $8,400-8,600 in mid-July and landed at mostly $8,100 in mid-August.

Costs to move Washington apples, pears and stone fruit to Boston moved from mostly $8,200 in mid-June to mostly $9,000 in mid-July back to mostly $7,800 in mid-August.

While rates have come down from mid- and late June peaks, they have stayed high compared to previous years.

“Spot market refrigerated rates followed a typical seasonal trend in July, with a decline of 11 cents (more than 4%) to $2.59 per mile, including fuel surcharges, down from June’s national average of $2.70, an all-time high,” said DAT Solutions market analyst Peggy Dorf.

“The difference this year is that the starting point was very high, so July rates were still more than 25% above July 2017 levels.”

As the end of August approached, some regions had solid truck availability, and others were still experiencing slight shortages, according to the USDA report issued Aug. 15.

Areas needing more trucks included Delaware, Maryland, North Carolina, southeast Missouri, southwest Indiana, southeast Illinois and the Vidalia area of Georgia.

“In mid-August, spot rates continue to drift down seasonally for reefer equipment, but the national average of $2.50 per mile for the month to-date is still higher than any monthly average prior to January 2018,” Dorf said Aug. 19.

“Outbound spot rates are trending up now in Grand Rapids, Mich., and Green Bay, Wis., as well as McAllen, Texas, in the Rio Grande Valley. Rates are also rising in northern New Jersey, with a mix of imports alongside domestic produce and refrigerated processed foods.”

 

Outlook

David Magaña, senior horticulture analyst with the RaboResearch team at Rabobank, expected rates to stay elevated.

“With the current higher truck driver wages, increased regulation and low unemployment rate, we expect high freight rates, and some volatility, to remain for the next few months,” Magaña said Aug. 20.

“Another factor is the demand for trucks coming from non-agricultural economic activities in different regions. Increased demand for trucks, from current economic growth rate, is putting more pressure on freight rates in general.”

Dorf noted that seasonal pull from both consumers and growers will continue to keep trucks in demand.

“Back-to-school season, followed by Halloween, generates additional demand for more fresh and refrigerated foods at consumer and commercial levels (chain restaurants and school cafeterias),” Dorf said.

“Harvests of apples, potatoes and other fall crops could lead to local shortages of reefer equipment in the Midwest and along the Mexican border.

“Starting in September, we expect see rates trending up in southern Idaho and other potato-growing regions,” Dorf said.

She expected rates would follow normal seasonal patterns but noted the cost curve remains shifted upward.

“Even if the weather is calm, rates are likely to remain about 20% above 2017 levels for the rest of the year,” Dorf said.

 
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