Freight Shippers: Make Peak Produce Seasons Work for You for Cold or Dry Freight »» A STRIVE TRANSPORTATION BRIEF

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1 Freight Shippers: Make Peak Produce Seasons Work for You for Cold or Dry Freight A STRIVE TRANSPORTATION BRIEF info@strivelogistics.com strivelogistics.com 1

2 Landscapers in northern states charge more in the summer because there is a high-demand for their services. Smart homeowners looking for a deal hit them up in October or November, when demand sags but before the snow arrives. Temperature-controlled trailer capacity is no different. Growing seasons for produce create huge demand, and rate spikes at different times in different parts of the country. Shippers or their broker partners that pay attention to these cycles can easily cut freight costs 6% 17%. You can find savings on freight moving either to or from these markets. The key is flexibility. For outbound runs, shippers of temperature-controlled freight that can move up or delay shipments around peak demand dates avoid the steepest mark-ups. For freight moving into these markets, carriers offer very aggressive deals to get reefers there at the height of harvest season, when margins are most lucrative. ADJUST TIMING ON HEADHAUL RUNS TO SAVE When the temperature warms up, produce starts to flow. It begins with citrus products during the spring in the southern tier of the country and then moves steadily north until autumn, when apples and potatoes ship from the northern-most states. If your need for reefers in certain markets coincides with these produce shipping seasons, carriers will leverage a seller s market to command a whopping premium. But advance planning can ease the financial pain of these headhaul runs. According to Mike Reding, a temperature-controlled carrier expert at Strive Logistics, flexible ship windows can make all the difference. For freight moving into these markets, carriers offer very aggressive deals to get reefers there at the height of harvest season, when margins are most lucrative. If a company says the load has to go today or tomorrow, there s very little we can do for cost avoidance in a hot market for reefer, says Reding. Companies that plan ahead and alert the broker to loads in advance see significant savings. If we ve got 7-10 days to reach out to a broad base of carriers, we can get a much better deal. For instance, a flexible window might allow us to match that outbound load with an inbound reefer shipment we are managing. info@strivelogistics.com strivelogistics.com 1

3 CONSIDER REEFERS FOR DRY FREIGHT MOVING TO TIGHT CAPACITY MARKETS Shippers who pay attention to produce seasons realize the most savings from reefer shipments moving into produce-growing markets. The closer the shipping window matches the peak demand period, the better rate you can get. And that goes for cold or dry freight. Many dry freight shippers don t consider reefer capacity. That s a mistake. Example: the cost differential between moving a dry and reefer trailer into Florida in spring and early summer is as high as 30%. That s how anxious carriers are to get their reefers into peak produce shipping markets. On average, shifting from dry van to reefer will realize a 6% 17% freight savings. Service levels also improve on reefer runs into high-demand freight markets, according to Strive s James Kuntz, who works with shippers of temperature-controlled freight. Drivers going into these markets are highly motivated and as a result their quality of service is exceptional says Kuntz. Reefer trailers do have some differences that will impact loading. The extra weight of the air conditioner will reduce load volumes slightly to an average of 43,500, and you ll lose an average of three inches on each side and six inches from the top due to insulation and air chute placement. But most products can ship on a reefer, as long as they are palletized. Because of the ridged metal floors of reefer trailers, floor-loaded products, like paper rolls, don t work because the floor causes indentations on the product. Leveraging reefer demand to reduce your rates doesn t only apply to produce-growing markets. Let s say there is a steady flow of reefer capacity moving meat from Missouri to Chicago. If you re shipping coffee, paper cups, dishware or a host of other commodities from Chicagoland, you can clean out that reefer and load up for very low-cost trip back to Kansas City, where more meat is waiting. ACTIVE TRAILER POPULATION IN THE U.S. 925,000 If there is a concern about moisture, the air conditioner can actually become a heater to completely dry out the trailer. 1,675,000 Cost savings are not the only benefit of leveraging reefer capacity creatively during produce shipping season. There are 375,000 refrigerated semi-trailers on the road in the U.S. If you are willing to ship your dry freight on reefers, there is a much better chance you will get the capacity you need. 375,000 Dry Van Reefer Specialty (flatbed, tanker, etc.) Source: info@strivelogistics.com strivelogistics.com 2

4 BARRIERS TO SHIPPING DRY FREIGHT IN REFRIGERATED TRAILERS A big reason you see empty reefer backhauls into produce shipping markets is that many dry freight shippers will use only dry vans. And, unfortunately, too many brokers are order-takers who dutifully execute these shipments without proactively suggesting alternatives. Some shippers are concerned about the reaction from customers when their load of paper towels arrives in a reefer. However, we ve found customers, such as big retailers, appreciate suppliers that come up with creative, cost-effective delivery solutions, says Strive s Reding. Other shippers might worry about the process of the transitioning a trailer that was carrying refrigerated freight to dry good standards. Modern brokers only utilize highly regarded carriers that have experience hauling dry freight in refrigerated trailers and these carriers know what to takes to properly prep their trailer, says Reding. That s how anxious carriers are to get their reefers into peak produce shipping markets. On average, shifting from dry van to reefer will realize a 7% 16% freight savings. TURNING A SELLER S MARKET INTO YOUR ADVANTAGE The key to turning peak produce shipping periods into savings is market knowledge. The right broker can be your best ally. You want a partner that maintains historical information on freight demand during these peak seasons and can use that data to forecast capacity. Modern brokers have technology that allows them to see where trucks are stationed and gauge supply and demand in real-time. The better ones will go a step further and proactively suggest creative, cost-saving strategies. With a broker such as this on your side, the next move is yours. If you re shipping to a retailer in Portland, Oregon during apple-picking season and your broker says Hey, if we don t double-stack, we can save 20% shifting from dry van to reefer, how will you respond? Our advice: stay flexible. info@strivelogistics.com strivelogistics.com 3

5 ABOUT STRIVE ABOUT Strive Logistics is the best third-party logistics company because we combine technology, innovation, and industry expertise with amazing customer service to deliver world-class transportation services. Since 1995, clients across North America have relied on our efficient, effective, and easy-to-use solutions to deliver their business. CONTACT US HEADQUARTERS: CHICAGO, IL 3008 N Lincoln Ave Chicago, IL Phone AUSTIN, TX 111 W 6th St, Ste 100 Austin, TX Phone Powered By: EXPERTISE EVERY STEP OF THE WAY We dedicate a team of logistics professionals to make sure your freight is managed from every angle. You ll work with members of our Customer Sales and Customer Operations teams each with the experience and knowledge to make shipping as easy as possible. [Strive has] a customer service and operations team second to none with constant communication and accessibility to accommodate our needs. TECHNOLOGY THAT DELIVERS SUCCESS LoadRunner provides you with access to one of the most powerful transportation management systems in the industry. LoadRunner reduces operational costs while increasing market opportunity through business analytics and real-time freight matching. With LoadRunner, you don t have to wait days to hear from us we match your freight with available capacity in seconds. TRUSTED CARRIERS Our exclusive partnerships and experience with premium suppliers allows us to be proactive in choosing the carriers we work with. We carefully screen our carriers to ensure that you receive a consistent, reliable, high level of service. We maintain a Carrier Scorecard in LoadRunner and utilize our matching system to ensure we put the most compatible carriers on your freight so you never have to worry about carrier management we ve got you covered on every load. PRIVATE FLEET Transportation Operations Manager, Food & Beverage Industry Reduced capacity, seasonality, and driver constraints can disturb your supply chain. We offer exclusive partnerships with private and dedicated fleet providers that remove service volatility and help deliver a consistent and reliable experience year round no matter what. INDUSTRIES SERVED From produce to paper products, we have experience shipping for every industry: Building Materials Commodities Consumer Packaged Goods Food & Beverage Produce Glass, Plastic & Packaging Materials Hazardous Materials Beer, Wine & Spirits Paper & Corrugate Piping Steel Automotive Many more info@strivelogistics.com strivelogistics.com 4