By Cain Adams
Trinity Logistics/Longboard Logistics
Rates have not fallen from the holiday highs. We are seeing McAllen coming alive and seeing high pricing coming out of the area. Last year McAllen to Atlanta 1-and-1 was $3,400. This year it’s more like $5,000.
Weather, mudslides, and DOT walking off the job really put Washington State in a bind this past week. Twenty feet of snow between California, Nevada, and Oregon didn’t help anything. The prices doubled overnight from Washington and Idaho back to California – $6,000 from Washington to Los Angeles was seen.
We think reefers have been staying home longer. With these rates, they are able to take less loads and still make a good living. We see many staying on the East Coast and not running to the Northwest because they are hearing of the two-day sitting time when Wyoming and mountain passes close.
We also think the larger onion sheds will start holding back a bit and lowering packing hours so they can make it a few more months. Will the onions make it through? Quality is a concern for us. Will we see more claims and rejections? So far so good.
Onions are pretty expensive per bag and we think sheds need to fulfill contracts. The smaller sheds, we think, will push to get done faster and not have to pack as long, thus lowering their labor costs.
We are watching the weather in Mexico. If it’s nice weather, then there may be a catch-22. That means a lot of other produce will come out of Mexico and keep McAllen at a high rate to trucks. The only advantage will be putting product on flatbeds.
Watch the weather to see if that is viable. Onion skins are very thin so be careful. If the weather is soggy and wet, then less will come out and keep the pricing high out of the other onion districts. It’s going to be a tough call. Keep an eye on McAllen freight costs looking both at reefer and flatbed rates.
We heard rail was much less expensive but the on-time delivery percentage was down. If you know a good rail guy, check in with them now and then. Maybe check Intermodal? Get creative.
Canada pulled a fast one, saying truckers who enter Canada – U.S. truck drivers and Canadian drivers – are now mandated to have a vaccine card.
If you are shipping into Canada, have your brokers screen drivers asking if they have a card. If the driver does not have a card, you may have a load stuck in quarantine for a few days.
The good news in all of this is everyone has food in their fridge. We are all complaining about the cost and inflation. That being said, we think the raising of interest rates will come in time to slow things down by the third and fourth quarter.
Will pricing come down in a grocery store though? We do not think so. That means more profit margin. Shop smart. Buy alternatives for now and learn new recipes. Be sure to include onions though! Cheers.