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Produce season pushes shippers to reevaluate rates, contracts

Shorter contracts offer long-term relief from market shifts

(Photo: Jim Allen / FreightWaves)

Temperatures are rising steadily throughout the Southeast, and that can only mean one thing: produce season. As farmers prepare for harvest, shippers should ready themselves for the seasonal rate increases and capacity shortages that accompany fresh fruits and veggies each year.. This year that means preparing for prices to continue climbing and continued strained capacity. 

“Generally, we will notice capacity tightening as we see seasonal, higher-paying loads increase. We usually recognize this more in the areas of the country that supply produce, like the Southeast region,” Emerge Founder and CEO Andrew Leto said. “However, as more capacity floods into those markets, it can cause a nationwide capacity crunch. Carriers looking for spot opportunities will typically ask for higher prices as the demand soars for the short term.”

As already-strained capacity networks begin to tighten, shippers should understand how these seasonal shifts will impact not only  their own lanes but the state of the overall market. When possible, shippers will want to rely on their contracted volume in order to protect themselves from spot surges.

If shippers choose to play in the spot market — or find themselves pushed into it — they should ready themselves for higher-than-typical spot pricing while produce moves, even if they are not moving freight in produce-heavy areas of the country.

For shippers hoping to hedge against these seasonal upsets both now and in the future, drilling into their processes and gaining comprehensive analytics around their pricing can offer a pathway to lower rates and less upset.

“As we continue to learn, shippers can get better insight into how to price their freight properly and what duration any given lane should go for  based on seasonality,” Leto said. “If you can prepare for and benchmark against an influx in seasonal freight by having shorter-term contracts in place that will bridge the short-term bursts of freight, you can help insulate from a wild spot market.”

With the Emerge Freight Procurement Platform, shippers gain access to benchmarked rates, allowing them to get a better idea of the overall market and maximize cost savings. This knowledge — combined with Emerge’s cutting-edge RFP platform — can help shippers revamp their contracts in a way that provides more protection against the potential long-term effects of seasonality. 

With Emerge, shippers are able to easily execute RFPs. By eliminating the time-consuming and costly manual labor that accompanies a traditional RFP process, shippers are able to run multiple shorter RFPs throughout the year instead of relying on annual agreements that become less and less realistic as time wears on. This flexibility allows shippers to plan around peak seasons in the most effective way possible.

“Preparation is power. The more we can be prepared for nuances in these situations, the better off we will be,” Leto said. “Our platform continues to get ‘smarter’ every day and benchmark off of historical cost trends. Technology begins to predict and provide insights. This enables shippers and carriers to make the most informed and cost-effective decisions for their freight.”

Click here to learn more about Emerge. 

Ashley Coker

Ashley is interested in everything that moves, especially trucks and planes. She covers air cargo, trucking and sponsored content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.