By Cain Adams
Trinity Logistics/Longboard Logistics
Trucks across the US will be tight again this fall. This week, however, has seen a bit of a break because there is less demand for produce across the board.
School and Labor Day will be the next big push. Your job and mine is to get the rates down a bit and hold. The spot market corrects itself, but we as brokers and shippers can push down 100 here and there until we see volume start rising and we have to go back up.
You see, a few things are on the horizon – things which are certain and uncertain. Pay attention to the news. Hurricanes, Fires, Real estate sales, Vietnam and COVID, and states going into higher levels due to COVID.
Watching a few states go into stage 2 gives us some long-term uncertainty. Remember what happened when restaurants made you mask up? Stage 2 is happening in a few states like Oregon, Washington and California. If states go to stage 3 or 4, then demand will shift from restaurants to stores. Customers who are diversified should do well though. Be diversified.
Researchers from Colorado State University have upped their 2021 hurricane prediction from 17 to 20. You don’t have to be a believer in global warming. Heck, Arizona was under water at some point, right? Seashells are found near the Four Corners at like 5000 feet elevation. Of course, that happened 100 million years ago. Why can’t it happen again?
The past can tell us a lot about our future. Maybe we should just build more lakes? Added storage, jobs, lower the oceans a touch, less concern over drought? Just a squirrel thought.
We are one-third the way through the season, but we still have not seen the peak to hurricane season. If a hurricane hits Louisiana, Mississippi, Alabama or the Florida Panhandle, we should see a rise of about 5 percent or so across the spot market board. But if a storm hits Houston or a direct hit to Florida, we can see an increase much higher and a lagging 10 percent across the spot market. This is because these areas ship in and out at a higher volume.
Storms hit China but they are called typhoons. Typhoons in China are starting to affect ocean crossing freight as we speak. A few ports had to close down for a week or so in China this week. This will send prices higher for ocean freight, congest shipping ports and increase the need for more trucks in about a month when vessels land.
This fall we may see reefers switch over to dry freight if the rates for dry are just as high as refrigerated. This happens in California when there is too much freight for dry vans to handle and closer to the trucker’s home base. This fall may see just that.
Be aware of the California ports this fall. Vietnam has been hit hard by COVID, so retailers have started shipping holiday freight now instead of starting in September. Retailers want to be sure items get on the boats and sailing instead of stuck in the congestion of freight sitting on docks in Asia. You may want to start buying your Christmas presents now. Hint hint.
So, we have storms, holiday freight and COVID, but we also have higher fuel and a shortage of about 30,000 drivers. Is there anything which could help curb higher prices? New equipment is starting to hit the roads, but not many new drivers are in the seats. Recruiters are starting to do a big push to keep drivers home more – shorter routes and getting creative with the transportation mix of intermodal, trains and trucks.
Housing has peaked, and there may even be a bit of a slowdown due to high housing costs for first time home buyers. A little slowdown in housing may bring some relief. That relief comes in 2022 though.
Higher sales of houses mean filling those houses with appliances and furniture. If it slows down, then those items shipping slows down. Get it? Interest rates may come up a bit, which too will slow housing sales down. Less household goods will be purchased, and the GDP may get back to a normal level. This is totally a prediction! But it makes a bit of sense. I hope so.
In conclusion, watch the news! Google search the above key areas to see what’s coming up. This week we started to see the switch from California and New Mexico. Washington has started up with smaller onions. Idaho should start coming on around Aug. 9 – 15. The heat in Northwest has been hard on the fields. Our suggestion is, find a few sources for larger onions and don’t tell anyone where you found them.
Some shippers don’t harvest till mid-September/October. It’s too soon to say what is out there. We think everyone should be figuring out what their customers’ needs are though.
We, too, are asking our customers what lanes they need us to focus on. We are emailing trucks from last year and calling them back to the lanes our customers are needing help with. Establishing relationships is what it is all about. Making friends along the way is the benefit.
Enjoy the new harvest, enjoy the August break, if you get one, and enjoy the work! Cheers!