Freight Rates Skyrocket
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.”
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.”
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