By Cain Adams
Trinity Logistics/Longboard Logistics, Meridian, ID
Last month we talked about rates and if they needed to be increased to keep trucking companies in business. According to Freightwaves, 640 freight companies with over 20,000 trucks were removed from the road in 2019.
Today, we see the increased freight costs, and it has caught many off guard. Inflation is here, truck load counts are up and rail may not be the same option as in 2019. We have an election between two guys who are battling a fierce fight with no landslide view.
Have you looked at your grocery bill lately? Everything is up. Once a price is higher and the item moves, the price stays put. Maybe a sale here and there, but pricing is slow to come down. Bargain shopping may be a way of life for many in 2021.
We, brokers shippers and truckers, have a huge part in this. As a broker, my job is to be the middleman. Pay a truck a minimum market rate to maximize my customer’s margin. This can be seen as “gouging” a trucker if my rate is below market rate. There have been times when I thought the rate for a lane should be a bit higher. Paying a guy $1 a mile is tough, but many times East to West freight only pays $1 a mile. On the other hand, paying a driver $4 a mile while seeing fuel pricing where it is, is tough.
The product has to ship. The old rock and a hard place.
The last few weeks we have been telling drivers, “No.” We also explain, to truckers our concern about inflation. They have a business model to maximize profits. A business model does not have the words “be fair” in it, though.
Some get it and come down off their pricing. Others hang up. Still, it’s all of our jobs to work together to make a living, keep stores filled and identify areas for improvement.
In August we saw a national average of $2.67 per mile. September, according to, TCI Capital is showing reefer rates up to an average of $2.81 in the Midwest and about $2.67 in the West. We have been seeing rates from $2.67 to $4 a mile out of Washington, Oregon and Idaho. Wisconsin is a solid $3 to 4 per mile to the East Coast and Florida.
This next week we should see a little dip, but it won’t last more than two weeks. There is just too much freight hitting the coast. Holiday freight is here, and we think the rates will stay where they are.
We do see a bit of data in the Potato and Onion Report. Last year Washington shipped 549, by rail, as of Sept. 29. This year it shows 18. Total loads from the Columbia Basin 2019 was 6,570, while 2020 is at 6,377. Idaho on the other hand, shipped a total of 4,264 loads as of Sept. 29, 2019, and is at a staggering 5,567 loads same date in 2020. Together, including other onion areas, about 2,000 more loads shipped this year over last year.
Potato loads added another surplus of 1,000 loads over last year this time.
So, keep the seat belts on. 2020 is not over. Say no when you have to, but know what the landscape is looking like.
No matter who you are voting for, remember we are all on the same team. Even husbands and wives bicker now and then. They figure it out because it’s unconditional. Tempers will fly because things are said, but even opposing players in the NFL can shake hands and say, “See you next time. Good game.”
Cheers.
