Following a year of disruption, the tidal wave of shortages seems to be a recurring theme. The construction market is at an all-time high, and the weather seems all but willing to cooperate. At the same time, producers are realizing the fruits of their labor with ample rain bringing the promise of a bumper crop. However, those hopes are at risk due to the severe capacity reductions plaguing regions across the US. As the produce season marches forward, the risk of loss, due to the perishing of goods or simply being unable to guarantee delivery, will continue to drive demand for more strategic shipping services. However, producers that take the time to think about the reality of the situation are better equipped to recognize the value of a strategic partnership to find capacity.
USDA Data Points to Capacity Shortage After Capacity Shortage Through Produce Season
The United States Department of Agriculture (USDA) publishes weekly reports on the state of produce transit, and across the board, markets from Atlanta through Philadelphia report shortages. Adequate coverage isn’t found until getting to sweet potatoes in Louisiana, apples and pears in Yakima Valley and Wenatchee District Washington. Meanwhile, the US pounds moving across truck shipments of fresh fruits and vegetables are outpacing imported produce at 280,000 pounds as of May 23, 2021. With a new report published every week and little signs of the capacity crunch resolving, the pressure is on for producers to find ample capacity with strategic value.
But first, it’s further valuable to think about the contributing factors causing the shortage.
- The availability of seasonal workers and a labor shortage in general due to the pandemic, as well as its effects of personal transportation and ability to get to the field, remains.
- Lumber is driving increased use of flatbeds to meet the construction boom.
- Carrier rates are continuing to climb, incentivizing drivers to accept local loads and forgo the necessary national moves to get produce to the destination.
What Are Shippers Doing to Find Capacity in a Tightening Market
The challenges with finding capacity are not necessarily new. However, the continued effects of disruption are making it harder than ever to find available drivers from the field through the last mile. Even for companies that wish to add more trailers or equipment, the semiconductor shortage is having an impact. This year, produce season demand for trucking is up 70% year over year, and that’s encouraging more producers to start thinking strategically about finding capacity.
For example, some ways a producer might leverage a 3PL like GlobalTranz include:
- Working with a pre-onboarded carrier network that can connect all the dots of local transportation service providers to find capacity.
- Reducing the costs of transportation, i.e., fuel surcharges, by leveraging zone skipping and freight consolidation to take advantage of the more cost-effective methods of transport where possible. For instance, long-haul produce moves might benefit from more rail transit, provided the goods will not perish along the journey.
- Using data analytics to recognize which carriers are most likely to have capacity, allowing producers to reduce harvesting to minimal levels to account for such delays.
Leveraging the scalability and size of larger entities to amp up the producer’s bargaining power helps create supply chain efficiency.
How Shippers Can Further Enhance Bargaining Power With 3PL Partnerships
Managed transportation has been a game-changer in logistics, but today’s producers and shippers could leverage a 3PL servicer to increase capacity by diversifying their carrier networks.
For instance, GlobalTranz already has all the carriers and service providers located within a centralized resource. That makes it easier to find coverage for loads throughout produce season. However, the real advantage rests in connecting the pieces to ensure the right type of transportation mode is used. Not all produce requires refrigeration, but then again, it may be necessary depending on transit time and the weather patterns.
It boils down to ensuring the proper view of the full network, what’s happening across all markets, ensuring proper rates for all shipments, consolidating freight in other areas to open more space for produce, and tracking everything from start to finish. That’s the only real way to get through the shortages that are happening. And in that space, managed services can further help shippers optimize their networks to mitigate this and future disruptions.
As customers return to their favorite restaurants, retailers and entertainment venues in greater strengths. As such, it’s going to be a marked advantage for producers that can find capacity at a reasonable rate going forward. That means it’s time to start applying data to find capacity wherever it lies. The alternative is a repeat of the massive stock-outs seen last year, but this time, they will primarily affect fresh foods, namely produce, dairy and meat. That’s the real risk.
What’s the Next Step
The current state of produce season is not hopeless. Yes, it will be difficult to find transportation capacity, but there is a better way forward on the horizon. Among all risks, including supply chain cybersecurity, there is a single outcome and trend: shippers that recognize disruption are better equipped to thrive through it. And part of that includes tapping people, technology, and attention to detail to ensure a prosperous harvest through the remainder of the year. Fortunately, GlobalTranz has the resources to make that a reality and mitigate risks as they arise. Request a GlobalTranz consultation to learn more about how people and technology can help your enterprise find capacity, keep produce from going bad after harvest, and avoid unnecessary price spikes along the way.