The trucking industry gears up for harvest season at the end of every summer, which generally adds to a further tightening of capacity — for a few reasons. For nearly a month, owner-operators who own farms remove their transportation capacity from the market to harvest and deliver products.
Brokers also use a dedicated set of carriers to haul oranges, watermelons, avocados, maize, cotton, or soybeans, depending on the month and geographic region, to assure the extra capacity needed during harvest season. Each market’s harvest season lasts only a few weeks, starting in the South and going up to the Midwest and Northwest.
“We know we have that extra capacity in the agriculture sector for those weeks because the product has to get there,” Mary O’Connell, FreightWaves’ 3PL industry analyst, explained. “It can’t possibly go wrong.” Fruits and vegetables are essential for human survival. Because we had those negotiations and built-in prices, we knew we could charge a little less than the current spot market rate. However, this influenced the available capacity in the spot market, causing the spot market to rise.”
The Reefer Outbound Tender Reject Index, as seen in the SONAR map below, is exceptionally high in the Northwest right now, indicating higher spot market rates and tighter capacity. During the summer, the region’s severe temperatures frequently generate wildfires, which reduce the available yield, raising the value of the crops and subsequent transportation. This region has a shortage of Christmas trees in the upcoming month, exacerbated by the hot weather this summer.
“The demand on farmers to ship goods on time is trickling down to retailers and supermarkets,” said Matt Harris, PowerFleet’s vice president of account management. “Shortages of harvest-related equipment and drivers have exacerbated supply chain disruptions and resulting in higher transportation costs, particularly for perishable items like fruit.” Customers are doubling down on technology that offers them complete visibility into every step of their deliveries to combat this and manage rising costs.”
Investments in a cold chain visibility and control system would assist in maintaining the integrity of the cargo and the optimal use of capacity when capacity is tight for refrigerated carriers hauling products with a short shelf life.
Remote monitoring lets dispatchers make changes to the load without involving the driver in the event of a temperature deviation or equipment failure. The PowerFleet LV-400 interfaces with all significant refrigerated brands, maximizing the driver’s time and, as a result, returning capacity to the market more efficiently.
“It’s difficult to say how much of the constrained capacity is market-driven or seasonal now.” “It’s becoming a trite phrase because it’s true,” Zach Strickland, head of freight market intelligence at FreightWaves, said. “Peak season isn’t as visible as the rest of the year.” Spot and contract rates are rising, but things on the supply side aren’t shifting significantly. There are many eyes on the supply chain right now, and a lot of innovation is on the way.”
