Expectations that produce demand would increase US truck capacity this spring and summer, thereby driving up truckload rates, are fading.
US shippers and importers are finding an ample supply of trucks ready to transport produce as the fruit and vegetable growing season ramps up. For the week ending June 11, the US Department of Agriculture (USDA) reported that truck capacity was at least “adequate” for produce shippers in 16 out of the 18 regions it tracks.
This abundant truck capacity is keeping downward pressure on produce shipping rates in most regions, according to USDA data.
In particular, South Texas along the US-Mexico border and Washington’s Yakima Valley reported a surplus of available trucks, the USDA stated in its June 12 Specialty Crop Truck Rate Report. A key factor contributing to this surplus is the lower volumes of produce being shipped.
The USDA report highlighted that produce shipments by weight, including both imports and domestically grown produce, were down 11.6% for the week ending June 8. This followed a 12.7% decrease the previous week and an 8.2% shortfall the week before that.
Nationwide, produce truckloads have decreased by 4% year over year as of last week, according to DAT Freight & Analytics. Both Mexico and California, major produce-growing regions, are generating fewer truckloads of vegetables and fruits this year.
“The Mexico produce season appears to have peaked earlier this year, with volumes about 6% lower than last year,” noted Dean Croke, principal analyst at DAT, in his latest weekly market report. “Most agricultural imports from Mexico enter the US through Pharr, Texas, in the McAllen market, where volumes were slightly up last week.”
However, linehaul truckload rates in the McAllen market fell by 15% week over week to $2.43 per mile, according to DAT.
Drought and last year’s hurricanes have reduced produce output in northern Mexico, leading to a drop in rates for many types of fruit and vegetable imports entering the US through Texas, the USDA reported.
At this time last year, the USDA reported a shortage of trucks in Nogales, Arizona, for loads of Mexican produce, Croke added.
While the produce outlook for many regions in California is better, outbound loads are still lagging behind last year’s volumes, according to DAT. California produced 36% of the country’s produce truckloads last week, down from 40% at the end of May last year. Florida accounted for 22% of last week’s national produce volume, Croke noted.
“Compared to last year’s 14% shipment volume at the end of May, Florida is having a great season,” he said.
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