Fruit & Vegetables by the Truckload
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1 DAT PRODUCE REPORT Fruit & Vegetables by the Truckload July 11: North Carolina, Georgia, Mississippi, Colorado and Central California By Mark Montague, MBA, Industry Rate Analyst
2 DAT PRODUCE REPORT 2 How We Measured Since mid-march, we have been using Truckload Rate Index to collect and analyze over 3, rates per month for refrigerated ( reefer ) vans on the spot market. In July, we identified trends in the weekly and monthly average rates for key produce lanes identified by the U.S. Department of Agriculture, then matched our results with USDA records, including the weekly USDA s Fruit and Vegetable Truck Rate Report. We typically find a pattern of reefer rate increases to support the USDA findings on available truck capacity in markets where fruit and vegetables are grown or imported. Executive Summary TransCore s second monthly Produce Report combines spot market freight rates from the company s Truckload Rate Index with data from the U.S. Department of Agriculture, analyzing seasonal and regional trends in truckload shipments of fruits and vegetables. Key findings include: Reefer rates in Eastern North Carolina rose 2.1% in July, despite a downturn at month end. Rates and freight volume increased in South Georgia in May and June, but slipped.1% in July. Central Mississippi reefer freight availability peaked in June, but rates rose 3.8% in July. In southern Colorado, low reefer rates rose rapidly in June and added 1.6% in July. Rates in the Central California produce market of Fresno slipped 2.3% in July, but may rebound in August. Areas of opportunity for reefers in August include select markets in Arizona, Oklahoma, Northern Texas and California. CA CO MS GA NC Spot Market Rates vs. Contract Rates In this month s report, we added a comparison of spot market rates with contract rates for reefers in the same lanes in June. Spot market rates exceeded contract rates for reefers in 42% of lanes and for 4% of freight movements, nationwide. Spot market rates typically exceed contract rates when strong seasonal demand generates excess freight in a given market. Brokers and other intermediaries must offer a higher rate under those conditions, to attract the carriers who can cover those freight movements. Spot market rates are the broker buy rates that are paid to carriers by freight brokers and other third-party logistics (3PL) providers, while contract rates are defined by direct business arrangements between the carrier and the shipper.
3 DAT PRODUCE REPORT 3 Origins For the second in this series of reports, we focused on the markets where fruit and vegetable crops were harvested in June and July: Key Origin Areas Covered in This Report 1. North Carolina 2. Georgia 3. Mississippi 4. Colorado. California California Colorado Mississippi Georgia North Carolina Load to Truck Ratio*.7+ Loads Per Truck Loads Per Truck Loads Per Truck -1 Loads Per Truck Destinations For each produce market, we consider lane rates to a selection of the ten major destination cities identified by the USDA. Seattle 6 Los Angeles Dallas Chicago 4 Atlanta New York 8 Philadelphia 9 Baltimore 2 1 Boston 3 Top Ten Destination Cities According to the USDA Report 1. Atlanta 2. Baltimore 3. Boston 4. Chicago. Dallas 6. Los Angeles 7. Miami 8. New York 9. Philadelphia. Seattle 7 Miami
4 DAT PRODUCE REPORT 4 Goldsboro Eastern North Carolina Goldsboro In North Carolina, potatoes, sweet potatoes and peanuts are harvested yearround, but pressure grows on reefer rates during the spring and summer, beginning with strawberry harvests in mid-april through mid-june. These are followed by blueberries from May through mid-july, and late summer brings watermelons and peaches, along with leafy vegetables, tomatoes and squashes. Reefer rates rose accordingly through mid-july in Goldsboro, a key produce market. Although load volume and rates began to slip in late July, the USDA continued to characterize truck capacity in Eastern North Carolina as a shortage. North Carolina Reefer Rates $2.68, up.3% $2.74, up 2.1% Goldsboro to Baltimore $2.9, up 16% Goldsboro to Philly $3.11, up % None 18.2 Shortage None 13. Shortage Potatoes, corn, greens, peaches, watermelons Goldsboro, NC North Carolina Loads Per Reefer 3 $2.74 $2.4 $2.61 $2.9 $2.23 May th Refrigerated freight volume rose steadily through May and June in the key produce market of Goldsboro, North Carolina. Outbound rates from Goldsboro rose from mid-june through mid-july, then slipped 24% in the seven days ending July 26. Rates shown above do not include fuel surcharges. The load-to-truck ratio for reefers in North Carolina tracked rising produce rate trends as the ratio climbed from 14 in the spring to more than 18 loads per truck in June. By the end of July, available loads declined for reefers statewide, and the ratio slipped to 13..
5 DAT PRODUCE REPORT Southern Georgia Valdosta As we file this report at the end of July, the produce season in Southern Georgia appears to be waning. In June, the average outbound reefer rate increased 18% from the produce growing market of Valdosta. Also in June, six outbound lanes from nearby Tifton showed spot market rates higher than contract rates, an indicator of heightened demand that confirms the 36% uptick in reefer loads posted in Georgia in June, compared to May. Demand for reefers dropped substantially in July, and rates began to slide after the Independence Day weekend. By, reefer rates were down.1% for the Valdosta market, compared to the June average. Valdosta Southern Georgia Reefer Rates $2.73, up 18% Valdosta to Baltimore $2.93, up 4% $2.9, down.1% Valdosta to Atlanta $2., up 6.8% Valdosta to Atlanta $2.11, down % 23. Adequate Valdosta to Baltimore $2.69, down 8.3% 6.9 Adequate Citrus, Avocados, Melons Valdosta, GA Georgia Loads Per Reefer 3 $2.27 $2.9 $2.8 $2.12 May th In the Southern Georgia markets of Valdosta and nearby Tifton, reefer rates spiked prior to the Memorial Day and July 4th weekends, then receded in the second half of July. Peaches and berries are among the time- and temperature-sensitive crops that are typically harvested in early summer Reefer load availability in Georgia outpaced California s spot market freight volume for the first six months of 11. Georgia loads increased 36% on the spot market from May to June, then dropped 62% in July. Refrigerated truck capacity increased % and 28% in the two consecutive months on the spot market, as the USDA reported adequate capacity in Southern Georgia for both June and July.
6 DAT PRODUCE REPORT 6 Jackson Central Mississippi Jackson We tracked reefer rates in Truckload Rate Index for lanes out of Jackson, MS, including three designated as key produce lanes. Spot market rates exceeded contract rates in 11 of the Jackson lanes in June, and rates rose for refrigerated vans in most major outbound lanes, compared to May. Berries, peaches, plums and apples are harvested in Mississippi in May, while June brings a variety of summer vegetables, a second berry harvest and the first watermelons. July is typically a quieter month for produce in the state, with seasonal produce becoming available again in August and September. This year s produce season in Mississippi was delayed by flooding and then disrupted by a heat wave in July. Central Mississippi Reefer Rates $1.69, up 2.7% Jackson to Dallas $2., up 12% Jackson to Atlanta $2.8, down 12% 12.9 Shortage $1.76, up 3.8% Jackson to Chicago $1.2, up 8.% Jackson to Atlanta $1.93, down 7.1% 8.4 Slight Shortage Potatoes, vegetables, watermelons, blueberries Jackson, MS Mississippi Loads Per Reefer 3 $1.63 $1.67 $1.91 $1.9 May th Reefer rates on the spot market exceeded contract rates in 11 outbound lanes from Jackson, Mississippi in June, while contract rates were higher in 7 lanes. rates for major produce lanes from Jackson rose 7.8% in May, compared to April. Rates climbed by another 2.7% in June and added 3.8% in July. Rates appear to be declining steadily since July 4th, however. The load-to-truck ratio is an indicator of spot market freight availability (loads) compared to truckload capacity. This key ratio increased for reefers statewide in Mississippi until the end of April, then declined steadily in May and June. In July, load availability dropped 4% with a mere % increase in trucks on the spot market. The USDA upgraded its assessment of truck capacity in the Jackson produce market from shortage to slight shortage in July.
7 DAT PRODUCE REPORT 7 Southern Colorado Center and Amarosa Spot market rates exceeded contract rates for only of 27 key outbound lanes from Denver, and reefer freight volume was low for other Colorado markets in June. Reefer rates for Southern Colorado are not especially high, compared to other regions that grow and import produce, because the growing seasons are brief and truck capacity is usually adequate. Southern Colorado Reefer Rates $1.42, up 12% $1.4, up 1.6% Center Center to Chicago $1.19, up 26% Center to Philadelphia $1.7, up 36% Center to Boston $1.96, down 7.3% Center to Dallas $1.47, down 11% 8..6 Slight Shortage Adequate Mixed Vegetables, Melons, Grapes, Mangos Center, CO Colorado Loads Per Reefer 3 $1.26 $1.29 $1.47 $1.7 $1.39 May th In the Southern Colorado produce region of Center and nearby Alamosa, reefer rates increased slowly throughout May and June, to peak at $1.7 per mile during the July 4th week. Even when the $.49 fuel surcharge is added, rates in this market were below the national average. Expect rates to trend up again in August, when apricots, peaches and plums are typically harvested. Spot market freight availability for reefers hit a peak in Colorado in June. Load volume increased 81% over May levels, while truck capacity declined by 9.3%. In July, load availability slipped 38%. Colorado s load-to-truck ratios show a counter-seasonal pattern, with a peak in winter and lower demand in spring and summer. That s because reefers are used predominantly in cold weather, to prevent freezing of sensitive cargo.
8 DAT PRODUCE REPORT 8 Fresno Central California Fresno and the San Joaquin Valley About 8% of domestically grown produce in the U.S. comes from California, which is home to many diverse regional markets and year-round crops. In the San Joaquin Valley city of Fresno, we track 1 outbound reefer lanes. Of those, 44 lanes yielded average spot market rates that were higher than contract rates in June. rates slipped 2.3% in July from a June peak in eight primary produce lanes (according to the destinations listed on page 3 of this report.) Loads designated for reefers declined 41% on the spot market statewide; the combination of declining volume and rates indicates a lull between seasons. Outbound rates from Fresno may increase again as additional crops become available for transport in late summer and into the fall. Central California Reefer Rates $2.3, up 23% Fresno to Miami $2., up 31% None 11.4 Slight Shortage $1.98, down 2.3% Fresno to Boston $2.1, up 9.% Fresno to Philadelphia $1.9, down 4.8% 7.1 Adequate Berries, peaches, plums, citrus, tomatoes, vegetables Fresno, CA California Loads Per Reefer 3 $1.62 $1.72 $2.18 $2.8 $1.93 May th Fresno, in the San Joaquin Valley of Central California, saw a 23% increase in reefer rates on the spot market from May to June. Fresno is a year-round market, and rates may increase again in August or September as new crops are harvested. Spot market freight availability for reefers in California jumped by 63% in June, and then dropped 41% in July, month over month. Reefer truckload capacity declined by 7.9% statewide in June and.8% in July, as carriers shifted assets to regions with higher demand.
9 DAT PRODUCE REPORT 9 Mark Montague, Industry Rate Analyst As a mathematician and statistician, Mark Montague has spent decades developing and implementing consistent, market-driven rate structures for transportation companies. Mark was instrumental in developing the dynamic rates database and analysis tools in TransCore s Truckload Rate Index for the Spot Market. Prior to joining TransCore in 9, Mark applied his expertise in logistics, rates and routing as a logistics manager and analyst for carriers, 3PLs and shippers. He holds an MBA in Transportation Management from Indiana University s Kelley School of Business. Truckload Rate Index is like Having a Rate Analyst at Your Fingertips TransCore s Truckload Rate Index is a sophisticated rates database and analysis toolkit. Truckload Rate Index includes Spot Market Rates, which are based on $4 billion in rate agreements between freight brokers and carriers. Spot Market Rates are updated daily for vans, reefers and flatbeds across the U.S. and Canada. Truckload Rate Index includes a separate database of 12 million freight bills recording shipper-to-carrier Contract Rates, which are updated monthly for the three equipment types. Mark Montague, MBA, Industry Rate Analyst, Transcore Freight Solutions For more information about Truckload Rate Index, contact a professional sales representative today. Call or visit TransCoreFreightSolutions.com 11 TransCore. All rights reserved. All trademarks are the property of their respective owners. *The Load-to-Truck Ratio is a useful indicator of demand and capacity in a given market. While it is a precise measuring tool, it is not always a true indication of supply and demand. As a general rule of thumb, if you see a high load-to-truck ratio for your preferred equipment type in a market, you can expect spot market rates to be higher than normal.
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