At the close of every summer, the trucking industry gears up for harvest season, which traditionally contributes to a further tightening of capacity — for a couple of reasons. Owner-operators who also own farms remove their trucking capacity from the market for over a month to harvest produce and deliver it to market.
Additionally, to ensure the extra capacity needed during harvest season, brokers use a dedicated group of carriers to haul oranges, watermelons, avocados, corn, cotton or soybeans — depending on the month and geographic region. Harvest season lasts only a couple weeks in each market, beginning in the South and moving up into the Midwest and Northwest.
“We know for those weeks that we have that extra capacity in the agriculture market, because produce has to get there,” said Mary O’Connell, FreightWaves’ 3PL market expert. “It can’t go bad. People need fruits and vegetables. We know that we could charge a little less than the current spot market rate, because we had those negotiations and built-in rates. But this did impact the capacity that was available in the spot market, causing the spot market to go up.”
The SONAR map below shows the Reefer Outbound Tender Reject Index, especially high right now in the Northwest, which corresponds to higher spot market rates and tighter capacity. The extreme temperatures in this region over the summer often cause wildfires that can shrink the available yield, increasing the value of the crops and subsequent transportation. This region is infamous for tight capacity in the upcoming month for Christmas trees, which were also impacted by this summer’s weather.
“We’re seeing the pressure on farmers to ship produce in a timely fashion is trickling down to retailers and grocers,” said Matt Harris, vice president of account management at PowerFleet. “Shortages on equipment and drivers for harvest have heightened supply chain disruptions and resulted in increased costs for transportation, particularly for refrigerated goods like produce. To combat this, we’re seeing customers double down on technology that gives them full visibility into every step of their deliveries in order to manage mounting costs.”
For those refrigerated carriers hauling produce with a limited lifespan, investments in a cold chain visibility and control solution would help ensure the integrity of the cargo and the efficient use of capacity during a time when capacity is scarce.
Should a temperature deviation or equipment failure occur, remote monitoring allows dispatchers to make changes to the load without having to involve the driver. PowerFleet LV-400 integrates with the major refrigerated brands, truly maximizing the driver’s time and ultimately, returning that capacity to the market in a more efficient way.
“It’s hard to tell anymore just how much of the tight capacity is market driven or seasonal. It’s becoming a cliched sentiment, because it’s true,” said Zach Strickland, FreightWaves’ director of freight market intelligence. “Peak season is not as noticeable. Spot rates and contract rates are going higher, but things aren’t fundamentally changing on the supply side. There’s a lot of eyes on the supply chain right now, and there’s a lot of innovation coming.”
To learn more about PowerFleet’s reefer solutions, click here.