Trucking rates for produce jump $1,000 ahead of Roadcheck

Dive Brief:

Trucking rates for fresh produce rose by as much as $1,000 in some regions of North America, The Packer reported, in the week leading up to the Commercial Vehicle Safety Alliance's International Roadcheck.
Van rates overall are at their highest rate since April 1, the day enforcement of the electronic logging device (ELD) mandate began, according to DAT.
The U.S. Department of Agriculture reported truck shortages in several regions of California, Texas, North Carolina, Mississippi and Louisiana. While some regions had "adequate" truck availability last week, none had surpluses.

Dive Insight:

Many truck drivers have called Roadcheck the worst week of the year, finding the inspections a hassle and choosing not to drive during the three days of inspection blitz.

"In years past, Roadcheck has led to tighter capacity and higher rates, with some truckers taking the week off and others losing driving time due to the inspections," DAT said in a blog post.

Of the 24 regions in the U.S., USDA said 12 had a shortage of trucks, 4 had a slight shortage and 8 had an adequate supply of trucks. In other words, 67% of the U.S. didn't have enough truck availability in the week before Roadcheck.

Along with capacity issues, some routes witnessed dramatic rate spikes. Between Miami and the Lower Rio Grande Valley of Texas, rates rose 62% from May 29 to June 5, according to USDA data. Between Santa Maria, California, and Seattle, rates jumped 39% in a week.

While this isn't the first time we've seen a spike in rates and slump in capacity around Roadcheck, the jump could raise concerns if rates don't quickly come down in the days following the inspection event.

CVSA's RoadCheck isn't the only factor contributing to higher trucking rates. Diesel prices have hovered above $3 per gallon for most of 2018. In addition, transporting fresh fruits and vegetables often requires the use of refrigerated containers known as reefers. Demand for reefers has grown at twice the rate of regular containers in the past five years.

Many shippers have reported falling revenues as a result of higher-than-expected transportation costs. While some are raising prices of their goods to offset costs, others are getting creative, building distribution centers close to consumers to reduce the number of miles a truck has to travel.