Shippers and receivers of fresh produce are often amazed and shocked about the unpredictability of the cost of transportation to move their loads.
Doug Stoiber, produce division director of business development for L&M Transportation Services Inc. discussed factors that can affect the cost of moving freight during an Oct. 26 Red Book University Web seminar.
Red Book Credit Services, Lenexa, Kan., is a division of Lincolnshire, Ill.-based Vance Publishing Corp., which owns The Packer. The transportation company is a division of Raleigh, N.C.-based L&M Cos. Inc.
Stoiber, who coordinates produce transportation efforts for L&Mâs eastern and western transportation staffs, said produce transportation, just like fruits and vegetables, has seasonal peaks and valleys in quality and price.
The elephant in the room is the American economy, which along with government actions has affected the cost of freight, he said.
Where and when trucks are needed can be as important as the hauling cost, Stoiber said.
The recession has forced many fruit and vegetable businesses to close during the past two years, hitting owner-operators the hardest, leading to fewer trucks available, he said.
Fruit and vegetables haulers almost always depend on non-produce freight to keep their rigs moving along their service lanes. Some produce carriers who lost business in other freight categories had to close, with the cost of operating increasing as revenues fell.
That double blow drove operators out of business, further eroding the supply of available produce haulers, Stoiber said.
âThe loss of freight moving from East Coast to West Coast really put a hurt on the produce business, which has great volume moving west to east,â he said. âAs the carriers lost their volumes of loads that paid them to move their trucks to California, Arizona, Idaho and Washington where they could pick up freight, there were fewer trucks available when the produce was ready to load.â
Different regions carry their own hurdles. The Northwest can be challenging because of the lack of available trucks, especially in the fall, when loads of Washington apples will often wait for trucks hauling Christmas trees, which pay better rates, he said. Geography plays a key role in shipments to and from southern Florida, with longer shipping times because out-of-state routes are only north/south.
Floridaâs large capacity of refrigerated space helps, Stoiber, said but there is little freight available during the June-October off-season, making that region a freight âdead zone.â
Shippers can count on paying an extra 40-50% to ship during those off times, he said.
Carbon emission regulations in California have also forced operators to invest in expensive refrigeration upgrades or stop delivering to the state, Stoiber said.
Stoiber also advised shippers to treat their truckers well and work in partnership with them based on loyalty, instead of trying to get the cheapest price.