Temperatures are rising across the country, which means produce season is kicking off. As we know, produce season brings higher shipping rates and tightened shipping capacity across the market. As fruits and vegetables are harvested — starting first in southeastern regions and then moving north — there will be a spike in time-sensitive shipping volume. As capacity moves with the demand, the pricing effects will be felt across the country.
Luckily for shippers, it seems this year’s produce season may not be as severe as recent years according to the USDA’s recent analysis on truck availability (more on that below). GlobalTranz anticipates this will be a somewhat typical season with capacity tightening to varying degrees throughout the country depending on the month, but recent constraints — from the pandemic, high fuel costs, and general supply chain disruptions — will make the impact appear less severe.
Here, we dive into the trends you can expect this produce season as well as tips for navigating the potential impacts. This includes the benefits of working with a third-party logistics (3PL) provider that has experience creating produce season strategies.
What should shippers expect for the 2022 produce season?
Since the start of the pandemic, the freight market has been volatile. And in recent months, high fuel costs have had a major impact on the industry, affecting pricing across the market. Capacity has been tighter than normal during the pandemic with unprecedented shipping rates. But we see that the market is beginning to level out, so we anticipate that the effects of the current produce season may not feel as extreme as previous years. Here’s why:
USDA data shows “adequate” shipping capacity in most regions across the U.S.
According to the May 18 edition of a weekly report released by the United States Department of Agriculture (USDA), nearly all regions have adequate capacity. Compared to our analysis of the edition that was released around the same time last year — which showed a shortage in nearly every region — there appears to be much better coverage, so we are going into this season much more optimistic. The areas that do not have adequate truck availability and are therefore worth noting are San Luis Valley Colorado, Central and South Florida and Georgia, which are all experiencing a slight shortage, and Eastern North Carolina, which is experiencing a shortage.
The USDA report is updated on a weekly basis, so it is a beneficial resource for shippers looking to stay on top of recent trends.
High fuel costs may have a greater impact on shippers during produce season
While the USDA report points to shipping capacity loosening up, it is important to watch fuel costs — which have been on the rise in recent months — as they will likely have a greater impact on shipping rates in the coming months. Finding ways to mitigate the effects of rising fuel costs will be essential for shippers looking to stick to a budget.
How can shippers better prepare for produce season?
During produce season, spot rates can be extremely volatile, and many carriers move to where the demand is in the southern regions of the country. Having contracted volume is the best solution for avoiding the higher shipping rates that come with this tightened shipping capacity. Shippers should proactively discuss how produce season may affect them and lock in capacity with carrier awards. Even short-term awards can help alleviate some pressure as it allows carriers to better plan and keep their costs under control. It’s important to anticipate your needs and work with your 3PL provider to secure capacity at a reasonable rate.
In the event that a shipper’s freight is volatile, and no plan exists, working with a 3PL can be even more important. Your 3PL should be flexible and able to help bring capacity solutions to the table when facing the challenges of produce season. Flexibility and making sure critical shipments go first are keys to successfully navigating a constrained market.
GlobalTranz can help navigate changing freight market conditions
At GlobalTranz, we work with shippers to plan ahead for seasonal demand spikes and shipping capacity constraints. When you partner with us, we’ll help you:
- Plan ahead and secure available capacity by tapping into an extensive pool of diverse carriers. GlobalTranz has a reliable network of temperature-controlled carriers and regional capacity strengths in areas where capacity is tightest. We also offer expedited shipping, drop-trailer programs, dedicated lanes and custom solutions for our customers.
- Find cost-effective solutions by choosing the most efficient mode of transportation and consolidating freight when possible.
- Identify shipment patterns based on our experience and deep network and gain valuable and timely market intel that can help you make critical decisions quickly.
- Track and monitor carrier performance to ensure you are choosing the right carrier during critical times.
Luckily, this year’s produce season doesn’t appear to be as drastic of a change given the other recent volatile market conditions we saw during the pandemic. But it’s still imperative for shippers to plan for potential capacity issues and rate spikes in order to optimize their supply chains. One of the most beneficial solutions is to partner with a 3PL who can alleviate many of the industry stresses. Tapping into a dense and diverse carrier network, accessing leading technology that gives you visibility and insights and leveraging the expertise of industry veterans are all benefits of working with GlobalTranz this produce season — and every season.
GlobalTranz is a partner who can help — whether you’re shipping produce or just trying to navigate the effects of the recent industry constraints. To get help planning for the 2022 produce season, reach out today to speak with a GlobalTranz expert.