Focus on Logistics with Cain Adams
Trinity Logistics, Boise Office Longboard Logistics, LLC
As a logistics geek, it’s been an interesting week observing the shifts in freight trends due to the changing weather. In Idaho, the warmer weather has everyone switching from jackets to shorts and tee-shirts, signaling an early onset of Spring. This change has a direct impact on freight rates, especially in the reefer market. We’ve seen a notable decrease in reefer rates by about 10-15% this week, influenced by the pleasant weather and improved driving conditions. This trend is particularly evident in lanes originating from regions known for onion and potato shipments.
Looking ahead, I’ve been analyzing future patterns and noticed some intriguing developments. California is expecting significant rainfall – between 1” to 5” – in areas stretching from Santa Barbara to San Diego over the next three days. This forecast, although I’m no meteorologist, suggests a potential decrease in California freight heading to Washington. Consequently, this could drive up the rates for freight moving from Washington back to California. Amidst this decline, produce brokers are finding some relief. Spot market freight rates have been hovering around $3.00 a mile on many lanes, and the frequency of random calls for trucks has dried up. This indicates that regular carriers are meeting current demands for those customers.
However, the impending storm system in California could lead to icy rain in the central United States by the end of next week, potentially causing trucking delays in the first week of February. This is a situation to monitor closely. On a brighter note, Wyoming’s weather seems favorable, with snow transitioning to rain. More safety for the drivers! Love this.
In Mexico, the harvest season is anticipated to happen in the first to the third week of February. This has flatbed carriers, who have been struggling recently, focused on McAllen, Texas. The scattered rains in Mexico could either benefit the crop size if the onions are upright or delay harvesting if they’re laid over. This could stabilize freight rates to the North East between $2.50 to $2.80 per mile, with rates from McAllen to Florida likely remaining around $3.00 a mile. So, if less product is moving then rates will be on the lower side. If more product is crossing then rates will be on the higher side. Ya, you already know this.
The onion market remains unpredictable for the next month, heavily influenced by the weather. Rains in the Texas valley can pressure freight rates in the Northwest. The onset of the McAllen harvest could have the opposite effect, albeit with higher prices per bag due to the preference for thick-skinned onions. Buyers love them because they just look so dang pretty.
In Florida, freight outflow has increased slightly but not enough to attract more trucks. Cooler weather has delayed some harvests, but an increase in output could lower the costs of inbound loads to Florida. Idaho, Oregon, and Washington rates are still on the decline.
Further reductions in freight rates, due to the high onion prices, are being requested. We’re also observing a trend towards more multi-stop loads, as receivers aim for Just in Time inventory, hoping for a drop in prices in the near future. It’s a balancing act and we are definitely circus stars.
At Trinity Logistics, Boise Office, and Longboard Logistics, LLC, we’re passionate about these dynamics and always ready to assist with lane pricing or research. Our goal is to share knowledge and help the community, independent of business transactions. Wishing everyone a prosperous February 2024!
Cheers, Cain Adams Trinity Logistics, Boise Office Longboard Logistics, LLC