Our logistics go-to, Cain Adams at Trinity Logistics/Longboard Logistics in Meridian, ID, took a long look how the transportation wheels are spinning, and this week he comments on a wide range of factors – protests, COVID, FMCSA rules and world market.
“Hours of Service exemption for produce has come to an end,” Cain said. “The Federal Motor Carrier Safety Administration has pulled back the rules since there is no longer a need. The shelves are full. For now.”
Pandemic-wise, Cain said, “Reports are coming in showing that reported cases of COVID are on the rise.” The increase, he noted, “makes sense,” and he people are “over it” as far as strict quarantine. “They want to enjoy one another’s company,” Cain said. “Furthermore, the protests brought many into close contact with one another.”
He continued, “Last month we saw a huge demand for onions when states started to open. Then, the protests came and squashed the demand. People were no longer wanting to go out. Many felt it was too dangerous. We still see grocery stores doing well, but the restaurant sector is still way down concerning freight.”
Looking at onion shipping areas, Cain said, “We are finishing up in Brawley over the next few weeks. Brawley came on strong, and freight rates were pretty high. They looked just like last years rates. Texas is pretty much finished, and we are now in New Mexico and Central California. We expect to start out of Washington with Walla Walla sweets soon, along with yellows in mid-July.”
Then there’s the overall economy, and Cain said, “We are seeing the stock market trying to rally in the oil sector. Russia and Saudi Arabia finally came to a deal to drop their product numbers. This helped keep oil stable. China has started to increase their oil imports. China is seeing an uptick in personal car sales because public transportation is seen as a hot spot for COVID – but citizens still need to get to work.”
There’s more, he said, “Recession, confirmed to take place in February, is here for a while. Produce brokers who are working on the spot market are banging their heads. Those with contract freight are doing well. Rates in the spot market are steady and mirror 2019 rates.”
Cain added, “Fuel is still down, but trucks are wanting that $2/mile or more for reefers. Flats and Conestoga trailers are still in high demand. When comparing reefer rates to flats and Conestoga, the risk reward is worth it on lanes like California to the East Coast.
“Weather is spotty, but a good broker knows to never use a four-foot tarp on these flatbed loads.”
He ended with this: “In conclusion, we have to say that this year feels like the stock market. One news report can send demand and pricing high or low. Each day has been different. You really have to keep your eye on what’s going on in each state. Are they open? Are the closed? Can a truck make it to the destination, or will it be met with a protest?”
Cain said, “These are real questions on every load. Staying positive every day and passing that forward seems to be helping our office. We hope you all can do the same. Life is good.”