Capacity Challenges During Produce Season in the South

The definition of Produce Season = The time period in which the largest volume of fruits and vegetables are harvested and shipped to food manufacturers, and grocery stores throughout the country.

Many of our customers, especially those in the South, that have been in Supply Chain for several years always prepare for the capacity challenges during produce season. It almost happens overnight like clockwork. As we all start to enjoy the warmer days of Spring, we also start to see the number of loads increase, and the number of trucks in major markets decrease. Inbound Logistics Magazine explains the shift in the market as this:

After a few dormant months during January, February, and March, freight volumes tend to pick up from April – July.  With produce season hot and heavy, and produce shippers paying top dollar for expedited loads, carriers can afford to be pickier with their freight options.

Capacity tightens up as carriers shift their trucks South to the borders to capitalize on the rates.  From Oranges, Peaches, Sugar Cane, Watermelons, and Tomatoes out of the East Coast, to grapefruits, cantaloupes, and berries out of California and Texas. Several customers often ask the question “Why does the dry van capacity tighten up if most of the produce is handled on refrigerated trucks?”. That’s a great question. Many of our shippers send out freight that can go on either dry vans or refrigerated trucks as long as the reefer unit is turned off and acts like a dry van trailer. Reefer trucks are abundant during the non-produce months. Not all produce loads need to be refrigerated. Many local produce runs can go out on a dry van shipment if it is loaded quickly and heads straight through to the destination same day. The rates are impacted by the normal backhaul lane freight flows turning into head-haul market lanes paying top dollar for 3 to 4 months. An example of this would be how the rates change from the South Texas Valley area coming up to the Dallas market, and from the Dallas market headed back down to the Valley area. The rate structure during produce season is turned upside down for 4 months. According to DAT North American Freight Index, spot market freight volume typically rises about 30% in the Spring.  Rates typically climb 25% or higher, and peak out in mid-May.

What Can You Do to Minimize the Cost Increases During Produce Season?

• Forecast accurately – Carriers appreciate the ability to plan ahead just as much as you do.  Providing us with accurate volume forecasts makes it easier to plan and sustain service. Increasing communication with your carriers days in advance helps to lock down trucks. Last minute loads will very difficult to cover, and will be at an expedited price.
• Become a “Shipper of choice” – Think about how you can make your business more attractive for carriers. Can you adjust shipping hours, lead times, open up longer delivery windows, etc.
• Long loading times and unloading times with the new ELD’s hurts you as a shipper with the trucking companies. Detention times become a micro managed situation to maximize every minute of down time for a carrier.

What Can ADL Do to Help You Minimize Costs As Our Customer?

• We need to leverage our relationships with carriers that handle our freight year round, and make sure we keep the costs in line with annual rates as much as possible. There are many cases where we hold our rates and lose money during this time of year, to sustain the annual relationships with our customers.
• Our Technology and tracking software allows us to see the truck both at the shipper and the receiver to verify arrival and departure times to accurately determine detention times, and save our customers money.
• We must communicate market conditions, rate increases, and plan accordingly with our customers to forecast load volumes together.
• All of you that choose to do business with us know that we are a true partner that will provide solutions, help you solve problems, get creative with our thinking, and support your service needs to the best of our abilities each and every day.