Logistics

Second U.S. Port Strike Averted as Union, Employers Reach Deal

Thu, 09 Jan 2025 15:11:20 GMT

The union representing 45,000 dock workers on the U.S. East and Gulf Coasts and their employers on Wednesday said they reached a tentative deal on a new six-year contract, averting a strike that could have snarled supply chains and taken a toll on the U.S. economy.

The United States Maritime Alliance employer group and the International Longshoremen’s Association, in a joint statement, called the agreement a “win-win.” The deal includes a resolution in automation, which had been the thorniest issue on the table.

“This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports — making them safer and more efficient, and creating the capacity they need to keep our supply chains strong,” the groups said.

Terms of the deal were not disclosed.

The talks had been extended until Jan. 15 to hammer a deal on automation. Shipping industry executives had been concerned that the parties would not be able to overcome their impasse, leading to a second ILA strike just days before President-elect Donald Trump’s Jan. 20 inauguration.

A three-day ILA strike in October triggered a surge in shipping prices and cargo backlogs at the 36 affected ports. Longshoremen returned to work after employers agreed to a 62% wage increase over the next six years.

ILA and USMX have agreed to continue operating under the current contract until the union can meet with its full Wage Scale Committee and schedule a ratification vote, and USMX members can ratify the terms of the final contract.

(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Alan Barona and Leslie Adler)

Freight Rates Skyrocket

Tue, 15 Nov 2022 07:27:49 GMT

Transportation woes continue to haunt Northeast shippers as trucks remain hard to come by and freight rates skyrocket because of rising fuel costs and a scarcity of drivers.

“Trucks are at a premium right now,” said Tracie Levin, controller at M. Levin and Co. , in Philadelphia.

“It’s a major hindrance for our industry and anyone else that uses trucking, which is basically every industry out there,” she said.

Shippers can’t even buy trucks.

“We’ve been on wait lists to get more trucks, trailer and tractors,” she said. “You just cannot get those things these days.”

But Levin is optimistic that things will turn around. She said some relief is already in evidence.

“We’re slowly able to get things again in a semi timely manner,” she said.

East Coast shippers have been dealing with transportation issues, but there are trucks available, said Tom Beaver, director of sales and marketing for Sunny Valley International Inc. , in Glassboro, N.J.

“Obviously, the cost of brokering a truck, especially for our (less-than-load) business, has increased considerably, but the same is true for all of our competitors,” he said. “We’re adjusting to this ‘new normal,’ but the important thing is that we can get fruit loaded and out to our customers on time and in full.”

Transportation challenges are more prevalent during the winter than they are during the spring and summer for Vineland, N.J.-based The Freshwave Fruit & Produce and its growing operation, Consalo Family Farms , said Chelsea Consalo, executive vice president.

That’s because the company has more local deals during the warmer months.

During the winter, the firm must bring in products from outside growing areas, such as Mexico, and transport fruits and vegetables imported from offshore growing regions, such as Chile, from U.S. ports.

“We have more trucks on the road (in winter),” she said.

Transportation costs are a major concern.

“We’re managing to get the trucks,” Consalo said. “It is just more expensive.”

(Farm Journal)

The Freshwave has added Nick Crisafulli, who recently completed an internship at Americold Logistics LLC, to its logistics staff to help arrange transportation.

Vineland-based Flaim Farms Inc . has its own fleet of trucks for local deliveries, said president Ryan Flaim.

But trying to find trucks for destinations that are farther out is challenging.

The company has good relationships with trucking firms, but rates are much higher than they have been in the past, Flaim said.

Finding transportation isn’t a problem, as long as you’re willing to pay exorbitant fees, said Joel Fierman, president of New York-based Joseph Fierman and Sons Inc .

“It’s really a pity when your cost for transportation pretty much is as high as your cost for goods,” he said.

He blamed the price spike on high fuel costs and a scarcity of drivers.

“It’s a terrible, terrible thing that this country is experiencing right now,” he said.

An added problem during the Christmas season was that many trucks were sidetracked delivering Christmas trees.

“It’s fast, easy money,” he said.

Filindo Colace, vice president of operations for Philadelphia-based Ryeco LLC , attributes the skyrocketing inflation rate the industry has experienced to high freight costs.

“Freight has been a premium for quite some time,” he said.

While seed prices and other costs have also gone up, he said high freight rates are 90% of the cause of inflation.

“Nothing in the industry has gone up at the same rate as freight has,” Colace said.

But he remains optimistic.

“We think the country is moving on,” he said. “We’re going to be as back-to-business as usual as possible in the first quarter of next year.”

He expected buying patterns to return to where they were in 2019.

“We hope the workforce returns to those levels, as well,” he said.

“If that’s the case, it will be our expectation that freight rates will start to lower because there are more truck drivers coming back into the workforce.”

Related articles:

Rising freight rates pose challenge

Distributors cope with rising freight costs

Bipartisan Bill Exempting Ag Haulers from ELD Regulation Reintroduced

Fri, 23 Sep 2022 20:01:55 GMT

A bill that would exempt agriculture haulers from using federally mandated electronic logging devices (ELD) has been reintroduced in the U.S. House of Representatives.

The Agricultural Business Electronic Logging Device Exemption Act of 2018 was put forward again by Representatives Collin C. Peterson (D-MN) and Greg Gianforte (R-MT) on March 13. The legislation would exempt agricultural businesses from the Federal Motor Carrier Association’s ELD requirements, allowing agriculture haulers to use either paper logs or an ELD to monitor hours of service.

The same bill was proposed last year during the 115th Congress and had 34 cosponsors, but was only referred to the House Transportation and Infrastructure Subcommittee on Highways and Transit.

A similar bill was also reintroduced by the Representatives Peterson and Gianfonte called the Small Carrier Electronic Logging Device Exemption Act of 2018 . It would exempt businesses which operate ten or fewer commercial trucks from ELD requirements, offering the option to use paper logs or an ELD to monitor hours of service. The bill had 36 cosponsors and was similarly referred to the House Transportation and Infrastructure Subcommittee on Highways and Transit.

“This important legislation will eliminate regulations for small trucking companies and will help reduce unnecessary stops and delays which threaten the agricultural products they help to transport,” says Peterson. “These bills are a win for small businesses in rural America and our farmers.”

“Electronic logging devices are more Washington red tape that ties up truckers and puts livestock and Montana livelihoods at risk,” Gianforte says. “These bills will help reduce the unnecessary burden this federal mandate pushes onto Montana’s small trucking operations, farmers, and ranchers.”

Support from Truckers and Agriculture

The bills have the support of groups representing agriculture and truckers. Here is what some of these organizations are saying about the legislative proposals:

“Minnesota Farm Bureau appreciates Chairman Peterson’s leadership in making sure that agriculture’s concerns with the Electronic Logging Device requirements are addressed. The safety of animals in transit, while protecting the safety of others on the road, is something Minnesota Farm Bureau takes very seriously. Transporting live animals and perishable products requires flexibility and a ‘one-size-fits-all’ does not work for transporting agricultural products,” says Kevin Paap, President- Minnesota Farm Bureau

“Minnesota cattle producers and livestock haulers are grateful to Congress and members like Representative Peterson for the ELD delay that they currently hold. We are also thankful that Representative Peterson and others continue to fight for needed flexibility for livestock haulers, who are an integral part of helping farmers feed this country and the world,” says Mike Landuyt, President-Minnesota State Cattlemen Association

“On behalf of the United States Cattlemen’s Association, we’d like to thank House Agriculture Committee Chairman Collin Peterson and Representative Greg Gianforte for listening to the concerns of not only livestock haulers, but all transporters of agricultural commodities. This bill will exempt agricultural businesses from the requirements of the Electronic Logging Devices (ELD) mandate, but still hold drivers accountable for reporting their Hours-of-Service – thereby ensuring the safety of livestock haulers, the animals they transport, and fellow road users,” says Steve Hilker, Transportation Committee Chairman, United States Cattlemen’s Association

“America’s sheep industry relies every day on safe, efficient and qualified livestock haulers. This act would give those haulers the needed flexibility to ensure both highway safety and animal welfare. We applaud Rep. Peterson and Rep. Gianforte on their leadership,” says Benny Cox, President - American Sheep Industry Association.

“TruckerNation is pleased to continually support Congressman Peterson in his efforts to bring legislative relief to small trucking companies and transporters of agricultural commodities. The Congress has a unique opportunity to pass this bipartisan legislation which impacts everyone who travels our nations highways and byways. Transportation continues to be an industry that is over legislated and regulated. It is refreshing to see efforts by legislative leaders to bring relief to the small business and agricultural transporters of our great Nation,” says TruckerNation.

“For farm equipment dealers, the Agricultural Business ELD Exemption Act provides urgently important regulatory relief that allows dealers to serve their customers. Agricultural operations face unique circumstances that require equipment dealers to provide equipment, service and parts during critical times such as harvest and planting seasons. Current ELD restrictions limit equipment dealers responsiveness to their farmer and rancher customer’s needs while driving up costs. This bill would increase uptime for agriculture producers and lower costs while maintaining safety standards,” says John Schmeiser, CEO, Western Equipment Dealers Association.

“On behalf of our members and the trucking industry, we at the United States Transportation Alliance (USTA) would like to thank you for the reintroduction of The Small Carrier Electronic Logging Device Exemption Act of 2018 and Agricultural Business Electronic Logging Device Exemption Act of 2018. It is a big step in the right direction. We’re happy to have been able to meet with your staff on this issue and look forward to more in the future,” says Mike Landis, CEO-United States Transportation Alliance.

Other ELD and Hours of Service Fixes

These bills are just the latest in a series of legislative proposals that have been made during the past few years. Here is a list of articles referring to other ELD and hours of service solutions:

More Hours of Service Fixes for Livestock Haulers Offered by Congress

Fri, 23 Sep 2022 20:01:50 GMT

Another bill has been proposed in Congress that seeks to address concerns for livestock haulers regarding hours of service regulations, adding to a growing list of legislative fixes.

The Modernizing Agricultural Transportation Act was put forward in the U.S. House of Representatives on May 2 by Representatives Collin Peterson (D-MN) and Greg Pence (R-IN). The legislation was Pence’s first bill that he has introduced since being elected into office in November and in a tweet the freshman congressman says the bill “reduces the regulatory burden and provides flexibility for truckers, farmers, and producers–America’s backbone.”

Washington mandates suffocate hard-working Hoosiers across the 6th District & beyond. I’m proud my first bill, the Modernizing Agricultural Transportation Act of 2019, reduces the regulatory burden & provides flexibility for truckers, farmers, and producers–America's backbone! 🇺🇸 pic.twitter.com/FX4oO1Pren
— Rep. Greg Pence (@RepGregPence) May 2, 2019

A similar version of the bill was reintroduced in the Senate during March by Senators John Hoeven (R-ND) and Michael Bennet (D-CO). There are currently 14 cosponsors of the Senate bill , while the House bill has just two cosponsors listed currently . The original Modernizing Agricultural Transportation Act was introduced in the Senate on June 12, 2018, but never made it out of committee and there was no House version of the bill.

The text for the House and Senate bill appear to have the same language with the goal of establishing “a working group to study regulatory and legislative improvements for the livestock, insect, and agricultural commodities transport industries, and for other purposes.”

The Senate version of the Modernizing Agricultural Transportation Act is supported by the National Cattlemen’s Beef Association (NCBA), United States Cattlemen’s Association (USCA), Livestock Marketing Association, National Pork Producers Council, American Farm Bureau Federation, American Honey Producers Association and Rocky Mountain Farmer’s Union.

Both NCBA and USCA released statements applauding Peterson – who is also the Chairman of the House Agriculture Committee – and Pence for moving ahead with the hours of service reform.

“We applaud Congress for working every angle to come up with solutions that would allow for the safe and efficient movement of cattle throughout the country. New regulations, imposed in 2017, do not work for the livestock transportation industry. We’ve been working strategically with Members of Congress and the Administration to find regulations that enhance highway safety, while also allowing transporters to deliver their live cargo as humanely as possible,” says USCA Transportation Committee Chairman Steve Hilker .

“Cattle producers are glad to see another bipartisan effort designed to provide much-needed relief for livestock haulers. This legislation demonstrates that U.S. Representatives Collin Peterson (D-MN) and Greg Pence (R-IN) are serious about addressing the implementation of electronic logging devices and the overly-restrictive hours of service rules that livestock haulers face today. We thank them and all the original co-sponsors for their support. NCBA will continue to work with members of Congress, industry groups, and the Department of Transportation on long-term solutions to our current transportation concerns,” says Jennifer Houston, president of NCBA .

Other ELD and Hours of Service Fixes

This bill is just the latest in a series of legislative proposals that have been made during the past few years. Just last week the Senate reintroduced a bill that would also reform hours of service regulations for livestock haulers called the Transporting Livestock Across America Safely Act .

Here is a list of articles referring to other ELD and hours of service solutions:

Senators Reintroduce Transporting Livestock Across America Safely Act

Fri, 23 Sep 2022 20:01:50 GMT

After not being able to move through hours of service reform for livestock haulers in the previous session of Congress, a group of Senators has brought forward legislation that might address concerns with the transportation rules.

The bipartisan Transporting Livestock Across America Safely Act (TLAAS) was brought forward again by co-sponsors Senators Ben Sasse (R-NE) and Jon Tester (D-MT) on May 1. Sasse was the lead on TLAAS during the 115th Congress during 2017-18 and that bill had 10 original co-sponsors, 23 co-sponsors by the end of the session. The first version of TLAAS never made it out of committee after being referred to the Senate Commerce, Science, and Transportation Committee on May 23, 2018 .

The latest version of TLAAS is co-sponsored by 17 other Senators including: Deb Fischer (R-NE), Kevin Cramer (R-ND), Jim Risch (R-ID), Steve Daines (R-MT), Marco Rubio (R-FL), Tina Smith (D-MN), Mike Crapo (R-ID), Pat Roberts (R-KS), Cindy Hyde-Smith (R-MS), Jerry Moran (R-KS), Doug Jones (D-AL), John Hoeven (R-ND), Mike Rounds (R-SD), Mike Braun (R-IN), Mike Enzi (R-WY), Joni Ernst (R-IA), and James Lankford (R-OK).

“Overly strict regulations are hurting our ranchers and our haulers. My legislation pushes back against those dumb regulations and works to promote safe transportation,” Sasse says . “This is good, reasonable, common-sense, bipartisan legislation — and it should pass so we can give Nebraskans the flexibility they need to keep livestock safe and to keep our state running and feeding the world.”

The summary of S. 1255 in the 116th Congress , also known as TLAAS, is as follows:

Provides that HOS and ELD requirements are inapplicable until after a driver travels more than 300-air miles from their source. Drive time for HOS purposes does not start until after 300-air mile threshold.
Exempts loading and unloading times from the HOS calculation of driving time.
Extends the HOS on-duty time maximum hour requirement from 11 hours to a minimum of 15 hours and a maximum of 18 hours of on-duty time.
Grants flexibility for drivers to rest at any point during their trip without counting against HOS time.
Allows drivers to complete their trip – regardless of HOS requirements – if they come within 150-air miles of their delivery point.
Ensures that, after the driver completes their delivery and the truck is unloaded, the driver will take a break for a period that is 5 hours less than the maximum on-duty time (10 hours if a 15-hour drive time).

“Ranchers and livestock haulers face unique circumstances when hauling live animals, and the rules should reflect that,” Tester says . “This bill gives them the flexibility they need to safely transport their product and get it to market in time while protecting both the animals and their bottom line.”

A version of TLAAS was also reintroduced in the House of Representatives on Jan. 10 by Rep. Ted Yoho (R-FL), who is a veterinarian. The House TLAAS bill now has 34 co-sponsors and was referred to the House Transportation and Infrastructure Subcommittee on Highways and Transit on Feb. 7.

Agricultural Support for TLAAS

The bill has the support of groups representing agriculture including Nebraska Farm Bureau, Nebraska Cattlemen, National Cattlemen’s Beef Association, U.S. Cattlemen’s Association, and the Livestock Marketing Association. Here is what some of these associations are saying about the legislative proposals:

“We greatly appreciate the work of Senators Tester and Sasse in bringing forth a prescriptive solution for livestock haulers that gives them the flexibility needed to get their live cargo to its destination as safely and efficiently as possible. This bill will not only allow drivers to take a rest break when it is needed, not when it is required, it will also increase the safety and welfare of the animals,” says United States Cattlemen’s Association (USCA) Transportation Committee Chairman Steve Hilker. “USCA has led on this issue from the beginning and we will see it through to its end. We look forward to broad bipartisan support of this legislation that will allow for swift passage into law.”
“The current Hours of Service rules for livestock haulers present major challenges for our industry and can often jeopardize the health and well-being of livestock,” says Colin Woodall, National Cattlemen’s Beef Association’s senior vice president of government affairs. “Hauling livestock is inherently different than hauling typical consumer goods, like paper towels or bottles of water. Live cattle cannot simply be left unattended in a trailer – especially in very hot or cold weather – for extended periods of time. This bill recognizes the unique needs of livestock haulers, and we are grateful for the continued support of Senator Sasse and the other co-sponsors.”
“Nebraska plays an integral role in the beef production chain, with a vast amount of livestock shipped in and out of our state daily,” says Nebraska Cattlemen President Mike Drinnin. “One size fits all federal regulations endanger the health and welfare of livestock by failing to account for the intricacies involved with hauling live animals. This legislation provides needed flexibility for livestock haulers while continuing to maintain the safety of our roads.”
“On behalf of the Nebraska Farm Bureau I want to thank Sen. Ben Sasse for his work in introducing the ‘Transporting Livestock Across America Safely Act,’” says Nebraska Farm Bureau President Steve Nelson. “Livestock production is a major contributor to Nebraska’s local and state economies. The ability to transport livestock in timely and safe manners plays a major role in the success of Nebraska’s livestock sector. Sen. Sasse’s bill is a step in the right direction to fixing regulations that fail to provide the flexibility needed to address the unique needs that exist in the transport of livestock.”

Other ELD and Hours of Service Fixes

This bill is just the latest in a series of legislative proposals that have been made during the past few years. Here is a list of articles referring to other ELD and hours of service solutions:

Truck rates staying hot despite more equipment, seasonal decrease in shipments

Fri, 23 Sep 2022 19:59:07 GMT

OVERVIEW:

Per-mile rates for refrigerated trucks are up 52%;
The industry outlook on truck rates for the remainder of 2022 shows that rates will head even higher;
DAT’s long-term forecast for spot-refrigerated truck rates predicts rates will increase in a range from 5 cents to 30 cents a mile higher by the end of the year;
As deliveries are rushed to retailers, shippers had a preference to be “on time” rather than “in full.” That meant less-than-full truckloads were delivered in order to keep product moving;
As compared to the previous, pre-pandemic times, spot market accounted for approx. 10% of freight. In November, spot market rates were sitting at about 25%;
If fuel costs approach 30% of truckers’ revenue, there is expected to be a rise in bankruptcies and exodus from the industry;
Tight freight conditions are expected to persist through much of the year.

Putting upward pressure on delivered produce prices, refrigerated truck rates have soared to nearly $5 per mile in early February, according to a survey by the USDA.

The $4.97 per-mile rate in early February for refrigerated trucks is up 52% from $3.27 per mile the same time last year and up nearly 70% compared with $2.93 per mile two years ago, according to the USDA.

Put another way, truck rates from Washington’s Yakima Valley to New York in early February were in a range from $11,000 to $13,000 per truck, up from $7,600 to $8,600 the same time a year ago, according to the USDA. For each 40-pound carton of apples shipped from Washington to New York, the freight cost per carton rose from $8.10 per carton a year ago to $12 per carton now.

The higher transportation costs were reflected in apple pricing. Size 72s Washington red delicious apples were trading at New York’s Hunts Point Wholesale Market at $42 to $45 per carton on Feb. 8, up from $40 per carton the same time a year ago.

OUTLOOK

The industry outlook on truck rates for the balance of 2022 reflects the belief by most that rates will head even higher.

According to a poll in the LinkedIn Fresh Produce Industry Discussion Group, nearly 80 people voting answered the questions:

(Farm Journal)

Nearly half of those voting predicted truck prices would increase 16% or more in 2022 compared with last year.

ROLLER COASTER

Since the pandemic began, it has been a wild ride for refrigerated truck rates.

Influential factors in the temperature-controlled market are the highly fragmented, temperature-controlled capacity base and the fact that temperature-controlled commodities are less shelf-stable than their dry counterparts, said Mark Petersen, vice president of transportation for C.H. Robinson, Eden Prairie, Minn.

“Delays and disruptions, which are more common in a disrupted market, lead to an immediate next-shipment impact, creating a wave of potential waste and inefficiency,” Petersen said. “Compounding this issue, temperature-control carriers generally have lower trailer-to-tractor ratios than traditional dry fleets due to the higher cost of equipment.” That means that any waste, such as detention or dwell time causes a direct impact to supply-and-demand imbalance, forcing an increase in market price, he said.

Read related: New CDL requirements could cost you up to $8,500 and weeks of training

“This is, in part, why it’s so important to have a partner with access to a broad network of carriers,” Petersen said.

Elevated dry van rates are also a factor in refrigerated truck prices. “As dry van rates have increased, the market has drawn some temp-controlled carriers to shift to dry, reinforcing the higher rates to keep carriers hauling temp-controlled freight,” he said.

Petersen said that, while challenges with temperature-control commodities will likely continue, C.H. Robinson sees a growing potential for a return to more traditional seasonal supply-and-demand cycles.

“As always in the produce supply chain, weather-related disruptions challenge supply chains, particularly when they line up with higher consumer demand around events like the summer grilling season,” he said.
In general, market disruptions have supported a shorter contract cycle and spikes in the spot market.

Read related: Supply chain gridlock causes $2.1B loss to California agriculture

“For retailers who find themselves in the spot market more often these days, we launched new technology called Market Rate IQ that’s the first of its kind in the industry,” he said. “ It gives them the ability to see the patterns in their spot freight and show them what changes they could make to save money.”

Petersen said using technology to gain visibility into real-time risks is essential to limit waste and control costs.

TRENDING UP

(Farm Journal)

Refrigerated truck rates typically plunge in January because of seasonally lower fruit and vegetable volume in the U.S., said Dean Croke, principal analyst for truckload freight marketplace DAT Solutions.

This year, refrigerated truck rates have been flat in January, and spot rates for refrigerated loads, excluding fuel, were $3.07 per mile at the end of the month. That is 82 cents per mile higher than the same week last year.

Contract rates have also risen, increasing 39 cents a mile compared with a year ago, he said.

Anything above $3 per mile is considered “new territory” for refrigerated truck rates, and Croke said the current seven-day rolling spot market average of $3.07 (excluding fuel) was about $1.22 per mile higher than the five-year average for that week.

Read related: 2022 brings big challenges in supply chain, logistics, trucking

Spot rates for refrigerated loads typically climb between March the peak domestic shipping season in the summer. This year, rates may stay elevated throughout the year, Croke said.

DAT’s long-term forecast for spot-refrigerated truck rates predicts rates will increase in a range from 5 cents to 30 cents a mile higher by the end of the year.

Higher freight rates in the past year have attracted more equipment and drivers to the industry, but Croke said that other constraints are keeping rates elevated.

The truck industry has added something like 230,000 power units in the last year, according to federal statistics of new carrier authorizations. As of November, the U.S. had a total of about 4.5 million trucks for hire in private fleets, Croke said.

“We’ve added capacity, but I think what’s happened is the volume of freight moving in the spot market has doubled in the last year,” he said. For 2021, the total number of loads moved was essentially flat, but the loads moving under contract dropped 14% and the loads moving on the spot market increased 14%.

The COVID-19 pandemic of 2020 created supply chain shortages that also contributed a massive shift to the spot freight market, rather than contracts, Croke said.

(Farm Journal)

Demand was increasing but supplies were limited by the pandemic bottlenecks, creating an imbalance in some shipping lanes and creating an urgency to acquire transportation through the spot market.

“What that meant was that capacity wasn’t where it should be, or predicted to be, and shippers had to go to the spot market,” he said.

As they rushed to deliver orders to retailers, shippers had a preference to be “on time” rather than “in full.” That meant less-than-full truckloads were delivered in order to keep product moving.

(Farm Journal)

In pre-pandemic times, Croke said about 10% of all freight moved on the spot market, and last November, it was 25% spot market and 75% contract. Now, he said, that ratio may be about 20% spot market and 80% contract.

“You could safely say the volumes moving on the spot market have doubled during the pandemic,” he said.

The driver shortage for trucks is misleading, he said. Instead of looking at truck capacity alone, Croke said the labor shortages at the grower-shippers and warehouses have held back deliveries.

“Every grower and every warehouse have struggled to get labor,” he said.

Even though there are thousands more trucks in the market, truck velocity has slowed.

When growers or distributors have fewer dock doors open and fewer warehouse workers available, trucks will spend longer times loading and unloading.

“I’ve been saying for six months that we don’t have a driver shortage, we have a driver velocity/throughput issue,” he said. More trucks are entering the market, but they’re cycling through markets at a slower speed, he said. “I think we have plenty of trucks, but they are not moving fast enough; they are spending more time loading and unloading. There is capacity, it’s just not burning through markets quick enough because of all of the imbalance we’ve got because of the pandemic labor shortages and supply chain disruptions, all those things that are still persisting.”

Read related: USDA announces partnership to ease port congestion and restore disrupted shipping services to U.S. grown agricultural commodities

(Farm Journal)

The spot market typically declines over time as elevated contract rates draw volume out of the spot market. “That’s why spot market rates should cool as contract rates remain elevated year over year,” Croke said.

Demand will eventually readjust and there will be more equilibrium in the market, but Croke said tight freight conditions are expected to persist through much of the year.

Even though fuel costs are high for truckers, they only represent about 25% of their revenue, which is a fairly standard ratio. If fuel costs approach 30% of truckers’ revenue, there is expected to be a rise in bankruptcies and exodus from the industry.

Croke said the truck protests in Canada about the vaccine mandate are increasing rates for some north-south lanes. “Of the 160,000 cross-border drives, about three quarters are Canadian,” he said, noting that “because of the protests up there in Canada, you’ve got fewer trucks coming across the border, and it has meant there’s been a tightening of capacity in those northbound lanes.”

(Farm Journal)

Freight rates appear to be quite strong, despite increasing numbers of trucks and drivers coming on to the market, said Dale Watkins, regulatory affairs manager at the Owner-Operator Independent Drivers Association, or OOIDA.

“I think, on the economic side, I think (drivers) are in a good place,” he said, but the OOIDA does not believe there is a driver shortage.

“There’s a record number of commercial driver’s license holders,” he said. “There are people available, you just need to pay them better; most of the ones that are complaining the loudest are the bigger carriers with the highest turnover.”

Watkins said there are some reports that the disruptive protests in Canada, linked to vaccination requirements for drivers moving cross-border commerce, could spread to the U.S.

“As to whether that will really happen, who knows?” Watkins said. “It depends on what our president will do and if he will pull back on these mandates or not.”

There may not be any quick relief to high freight rates for refrigerated trucks, said Seth Konkle, general manager at the Indianapolis, Ind.-based transportation provider Scotlynn Group.

“We’re hoping that (the rates) at least stabilize and stop the upward trend,” he said, noting that the amount of equipment available is slowly coming back.

However, long loading and unloading times have slowed trucks, he said.

Another industry leader said that the firm rate outlook shows no sign of backing down.

“We are forecasting refrigerated truck rates will remain elevated throughout the remainder of 2022,” said John Tonsil Jr., co-owner of Avondale, Pa.-based Gorilla Logistics. “Shippers have become accustomed to it and overall market conditions show no sign of letting up.”

As the U.S. loosens its COVID-19 restrictions, he said he foresees additional increases in consumer spending resulting in continued high refrigerated truck rates to shippers.

“Working with committed transportation partners will offer the best chance to mitigate some of the increases but the booming demand for products will continue to reflect in refrigerated truck rates,” Tonsil said.

Related: PODCAST: Shay Myers on freight issues, retail updates, social media

“I think a lot of shippers and receivers have gotten a lot better about being flexible and being quicker,” he said. However, because of labor shortages, some suppliers and receivers are still not able to load and unload trucks, and drivers are having to wait as much as a day to get unloaded.

“(Delays) are definitely restricting capacity even more than it already is,” Konkle said.

Some shippers want to increase contract pricing, but Konkle said that the carrier is reluctant to do year-long commitments because of the potential volatility of the market.

“We’re a little bit more willing to do three to three- or six-month commitments, which ultimately is going to benefit the shippers because, at some point, there’s going to be some relief in capacity and the rates will soften up,” he said. “Really, until COVID is completely behind us, we’re trying to avoid long-term commitments as much as possible.”