USDA takes a close look at truck rates. Add New Topic
April 16, 2018 at 1:16 pm #17626
USDA takes a close look at truck rates.
With tonnage of fruits and vegetables nearing record levels, spot refrigerated truck rates for fresh produce reached 40-year highs at the end of 2017 and early 2018. A new government report says the spike in rates may not be over.
Sustained economic growth in 2018 may continue to put upward pressure on rates this year, according to the 31-page Agricultural Refrigerated Truck Quarterly, published in March by the U.S. Department of Agriculture,
The same pressures that squeezed the transportation market for fruit and vegetable trucks touched all aspects of the trucking industry, said Adam Sparger, economist with the USDA and coordinator of the quarterly report.
“The driver shortage, capacity issues, increased rates — we were seeing those in all different segments of the truck market,” he said March 28.
The USDA’s Agricultural Marketing Service doesn’t predict the future of the economy, but Sparger said the trends through March indicates a growing demand for trucks.
With diminished truck capacity in the system, the report said any disruptions to the supply chain could be widespread.
With trucking accounting for about 70% of domestic freight tonnage, trends showed the sector was heating up with the U.S. economy in the fourth quarter, according to the report.
Fourth-quarter 2017 tonnage of all truck freight, as reported by the American Trucking Association, was up 3.7% from the previous quarter and 8.1% higher than the fourth quarter of 2016. Total tonnage for 2017 was up 3.8% from 2016, according to the association, which was the biggest annual increase since 2013.
Diesel fuel rates in the fourth quarter were $2.87 per gallon, up 9% from the previous quarter and 16% above the fourth quarter of 2016
What’s more, the USDA report said refrigerated fruit and vegetable shipments in the fourth quarter of 2017, at 7.72 million tons, were the third-highest on record. The quarter trailed only the 2016 mark of 8.05 million tons and 7.99 million tons in 2011, according to the USDA.
Total refrigerated fruit and vegetable shipments for all of 2017 were a record 33.6 million tons, up 0.5% from 33.4 million tons in 2016.
Behind the wheel
If current trends continue, the American Trucking Association estimates the driver shortage of 48,000 positions in 2015 could grow to 175,000 positions by 2025, the USDA report said.
The electronic logging device mandate has been disruptive for many carriers, with many shipping point districts reporting shortages immediately after the Dec. 18 ELD deadline.
Fourth-quarter fruit and vegetable truck rates of $2.55 per mile for routes from 500 to 1,500 miles were up 25% over year-ago levels, and rates of $2.52 per mile for routes of 1,500 miles to 2,500 miles were up 24% over the fourth quarter of 2016.
The USDA’s Market News reported that truck rates on Jan. 10 crossed the $10,000 per truck threshold in several districts. For example, January rates to Miami from Idaho were as high as $10,200 per truck, up from $6,800 the previous year.
Truck rates in late March had backed off historic highs in January but were still higher than a year ago.
For Mexican produce crossings through Nogales, Ariz., the USDA said average truck rates to New York were $5,800 to $6,800 on March 27, down from $6,000 to $7,000 on March 8 and well off the rates of $9,000 to $9,800 reported in mid-January.
Still, late March rates were above the same time last year, when trucks from Nogales to New York were running at $5,000 to $5,200, according to the USDA.
The next quarterly report on the refrigerated truck market for fruits and vegetables is expected by the end of May, Sparger said.
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