What Shippers Can Expect from Produce Season 2021
One of the most significant events on the supply chain calendar of U.S. shippers is produce season, a time when perishable vegetables and fruits are harvested in southern climates from areas like Florida, California, Arizona, Texas, and Mexico, and shipped to major markets across the country.
Taking place each year from mid-spring through the end of summer, produce season is impactful because it puts upward pressure on freight shipping rates, which affects shippers both inside and outside the produce sector. Although the transportation and logistics industry is still dealing with challenges caused by the pandemic, it's possible that the 2021 produce season will reestablish some sort of normalcy. However, based on factors within the marketplace this year, that may not be the case.
The Cause and Impact of Produce Season
In simple terms, it’s the rise in crop volumes and the heightened demand for trucks to transport these crops that impact capacity during this season. These factors lead to an increase in rates not only for shippers who utilize trucks with refrigerated capabilities in harvesting areas but for a majority of shippers across other modes and regions as well.
What Makes Produce Season Different This Year?
There are a few additional factors shippers should examine as they adjust their shipping strategies this produce season. For example, this year produce demand may be even higher than normal as states begin to reopen restaurants and other businesses. Since restaurant dining has been limited during the past year, it’s reasonable to expect there is a large amount of pent-up consumer demand for eating at restaurants.
In addition, even before produce season, rates were trending in an upward direction. In fact, DAT reported a 34.1% year-over-year (YOY) increase in reefer spot rates in March 2021 compared to March 2020. This indicates that rates started from an elevated position this year compared to last year and will likely continue to rise due to reefer demand during produce season. Also, data from the U.S. Energy Information Administration shows that fuel is running almost a dollar more per gallon from the lowest price point that fuel dropped to during the pandemic in May 2020.
Lastly, capacity challenges have been impacting shippers both domestically and internationally, creating significant disruption that we expect to be exacerbated by produce season. Driver shortage remains at the forefront as carriers struggle to retain and bring in drivers. We also have seen trailer and container shortages limit carriers’ ability to handle volumes. We expect this trend to continue through at least the next few months.
How You Can Prepare for Produce Season
The previously mentioned factors make it hard to predict exactly how produce season 2021 will play out. However, it is important for shippers to closely watch how all these current issues may magnify the typical challenges of the season. Here’s what you can do to avoid potential issues during this time:
- Leverage Echo’s team of logistics experts to help keep you informed of changes in the freight market during produce season
- Factor in the longer lead time it may take to source trucks
- Ship your freight as early as possible and build flexibility into your delivery date
- Let Echo help you make adjustments to your transportation strategies should the need arise
- Consider Echo’s multimodal shipping solutions to explore alternate transportation options
At Echo Global Logistics, we’re here to help you navigate the freight market during produce season and all year round. We can evaluate your unique transportation needs and work with you to create a strategy that will help you prepare for and mitigate the challenges brought on by produce season.