Reefer Report: Timing (and location) are everything for produce carriers


Within the final 30 days, watermelons, potatoes, onions, apples, tomatoes, and strawberries have dominated truckload produce volumes however with a twist. As a result of weather-impacted late begin to the West Coast season, extra quantity is coming from Mexico to offset decrease volumes in California. Nonetheless, nationwide volumes are down round 4% y/y, in keeping with the USDA for the week ending 19 June. That shift from home to imported quantity from Mexico presents alternatives and challenges for truckload carriers as they consider the place to place belongings to benefit from increased volumes and spot charges. Take tomato manufacturing, for instance. Although Mexico provides 90% of annual tomato manufacturing for the U.S. yearly, there are two overlapping manufacturing/harvest peaks in numerous areas. The primary peak is from December to April, adopted by the second harvest from Could to November. 

Timing is every little thing, however then so is location. The primary peak is dominated by the state of Sinaloa on the Gulf of California. It’s ideally positioned to ship export quantity through Nogalies within the Tucson freight market, which accounts for 26% of annual exports to the U.S., peaking in April. Instantly after, volumes crossing into Arizona tail off and shift 1,200 miles east to Texas within the McAllen freight market. The Could to November harvest interval shifts in Mexico to southern states, together with San Luis Potosi, Michoacan, and Zacatecas, that are nearer to the Pharr, TX border crossing in south Texas, which accounts for 34% of tomato export to the U.S. Figuring out when and the place tomato manufacturing is going on is important for truckload carriers and brokers. 

The same pattern happens on our northern border. Although Canada accounts for 8% of annual tomato imports, 45% of manufacturing is imported in June, July, and August The principle rising space in Canada is in Southwestern Ontario in Kent and Essex Counties centered round Leamington, simply 45 minutes by truck from the Ambassador Bridge industrial crossing zone into the united stateswhere three-quarters of tomatoes roll throughout the border. 

Market Watch

All charges cited under exclude gasoline surcharges except in any other case famous.

Because the produce season strikes additional north and into the Southeast, capability is tightening in Savannah and Tifton markets, the place spot charges have been up $0.02/mile w/w to $2.48/mile. Georgia state-level charges are simply $0.02/mile decrease at $2.46/mile, which is $0.09/mile increased than in 2019. On the high-volume reefer lane between Atlanta and Orlando, capability was very tight final week; spot charges jumped to $3.23/mile, the very best since final August. Masses 900 miles north to Hunts Level, NY, the biggest produce market within the nation, at $3.07/mile, was round $0.28/mile decrease in comparison with the earlier yr. 

On the West Coast in Fresno, spot charges cooled barely, dropping by $0.03/mile to $2.39/mile, whereas in Stockton, dwelling to the biggest cherry-producing nation in Lodi, CA, outbound reefer charges elevated $0.03/mile to $2.44/mile. Cherry season in Washington State is simply beginning to come on-line and is forward of the 2022 season. In comparison with California’s shorter season, which accounts for 18% of nationwide cherry manufacturing, Washington State produced three-quarters of the nationwide quantity and will likely be an important driver of reefer linehaul spot charges within the subsequent two months within the Pacific Northwest. State common charges in Washington at $1.58/mile have been up $0.03/mile final week and by the identical quantity in comparison with 2019. 

Load to Truck Ratio (LTR)

After dropping over the 4 prior weeks, reefer spot market volumes reversed course final week, growing by 3% w/w. The gradual begin to the produce season and lagging volumes in California have lowered general market volumes for temperature-control carriers to this point this season. In keeping with the USDA, nationwide volumes are 8% decrease than final yr, and in California, volumes are 33% decrease. Service tools posts have been 10% decrease final week, ensuing within the reefer load-to-truck (LTR) growing barely from 3.29 to three.77. 

Spot Charges

Usually reefer spot charges are heating up within the lead-up to July 4 celebrations, however not this yr because the spot market continues to float sideways. Reefer linehaul charges decreased by simply over a penny per mile final week to a nationwide common of $2.04/mile. Produce season usually lifts spot charges by round $0.18/mile between mid-April and this week; that enhance is simply $0.10/mile this yr. Final week’s nationwide common was simply $0.08/mile increased than in 2019, and in comparison with the identical time the earlier yr, spot charges are $0.24/mile decrease.

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