Produce Shipping Affected by Weather, Local Trends
This story appears in the July 9 print edition of Transport Topics.
The produce shipping season is in full swing this year and affected by unpredictable weather patterns that have created shipping peaks in parts of the South and Pacific Northwest and weaker-than-usual demand in California, experts said.
“The season is typical so far — with peaks and valleys” said Dan Vache, vice president of supply chain management for the United Fresh Produce Association, whose members include grocers and growers.
“We are having a wonderful, bumper cherry crop, and the projections are that the apple crop will be record-setting,” he said, referring to activity in Washington state helped by good weather.
However, he added “one man’s demise helps another,” noting that those crops will fetch higher prices because the same fruits were wiped out elsewhere by an early frost.
“Weather is the main factor that changes the markets,” said Kerry Byrne, executive vice president at Total Quality Logistics, Cincinnati, a broker whose truckload produce shipments have increased 22% in 2012 from a year ago.
Sometimes growers catch a break, he said, such as Florida producers whose crops were shipped before Tropical Storm Debby dumped 24 inches of rain in some areas.
Jon Samson, executive director of the Agricultural and Food Transporters Conference of American Trucking Associations, agreed that weather plays a crucial role. “The Midwest has been dry; they have had drought issues,” he said. “It hasn’t been adverse for some produce, but the crops [such as corn] are a little behind.”
Because the produce trucking market is dominated by individual owner-operators, there are no solid statistics to measure shipment volumes for the entire produce industry, said Kenny Lund, vice president of operations for Allen Lund Co., a transportation brokerage specializing in produce and based in La Cañada, Calif.
Lund said California’s produce has been hurt by the weather, which is important because the state supplies half of the fruits and vegetables sold in the United States.
Storms delayed planting, making capacity generally more abundant than usual, he said.
Byrne noted that California hail storms hurt peaches and other fruit.
However, Lund said there still are peaks when brokers and shippers become desperate.
One recent example was Friday, June 29, a date that Lund termed “the triple witching hour,” because it was the end of the week and the end of the month, and there was a push to deliver produce before the Fourth of July holiday.
Demand is surging in other parts of the country, particularly in the South, said Mark Montague, an analyst who writes a monthly produce report for load board operator TransCore’s DAT Network, Portland, Ore.
Trucking business is strong in Georgia, Louisiana, Mississippi and the Carolinas, where produce such as strawberries, potatoes and onions are grown.
“If it’s got wheels and the crop won’t spoil overnight, they’ll use it,” Montague said, referring to the type of trucks that are pressed into service when demand is very strong.
“The push to use locally grown produce and programs that will help the farms is gaining steam from 2011 to 2012,” Byrne said. “We see more restaurants and food service companies buying locally grown produce. It has caused a little change in the market, but not necessarily a major factor yet.
Lund said he believed the movement toward local sourcing was one reason why California demand was weaker than usual.
One obvious local sourcing benefit, Vache said, was lower transportation costs for a load delivered to a supermarket in the Northeast from nearby farms.
A cross-country truck shipment during the peak periods can cost $7,000 or more, Vache said. High shipping costs could change Western planting patterns if local sourcing becomes a long-term trend.
Rates now are at the highest point this year, TransCore reported, reaching $2.24 per mile on average, including fuel surcharge. That’s 3 cents per mile above June 2011 and 33 cents per mile above January 2012.
Montague cited another development that could affect sourcing.
Mexico is completing a highway project that will create an interstate-quality highway from West Coast ports and growing areas to Texas border crossings.
The new Highway 40 will shorten the distance for produce shipments to the United States by 400 to 700 miles. That shorter distance will make some Mexican crops more economical to ship and could displace U.S. fruits and vegetables that will have higher shipping costs after the new road is completed.
Until the highway is finished later this year, produce typically travels through Nogales, Ariz.
