Truck rates don't reach last year's stratospheric level
by Tim Linden | August 24, 2009
High fuel prices and a severe transportation shortage caused some coast-to- coast truck rates to top $10,000 a year ago. That has not been the case this year; in fact, rates haven't come close.
"Last year there were some five-digit rates, but the highest I've seen from California to Boston has only been $6,500 to $7,000," said Edin Saric, transportation manager for Mo-Tex transportation in St. Louis. "Rates are not as high as last year because business is down. We have hit a couple of peaks where truckers have asked for a ridiculous rate, but most of the time it has been fairly easy to secure trucks. I don't see any problems here on out."
Mike Laws of Frontera Fresh Logistics in Naples, FL, concurred. "We've seen the rates come down to a reasonable level this year," he said. "There are always going to be your peaks and valleys, but it is nothing like last year. Volume is off."
Jeff Moore, vice president of sales for Tom Lange Co.'s Midwest region, which includes Lange Logistics, said that rates, "especially heading west, are surprisingly low. There are some truck lines that aren't even running out West because the rates are low."
Lange Logistics often secures backhaul loads of manufactured goods for trucks going to the West Coast looking for higher-priced perishable loads to take to the Midwest or the East Coast. Mr. Moore said that the economy is playing a big role in driving rates down. In the first place, he said, there are fewer loads because there are fewer sales. Second, manufacturing firms are doing whatever they can to cut costs. "The use of rail has increased," he said. "That means [fewer] truckloads."
He said that it has been a major challenge to secure loads for owner- operators to get out west. However, this has not created a shortage of equipment, so while eastbound rates are higher than westbound hauls, they are still much lower than they were last year.
Mr. Moore said that unemployment has led to a big increase in the number of people applying for truck-driving jobs, so truck lines have had no trouble filling those slots. "Three or four years ago, I went to a town hall meeting at PMA [Produce Marketing Association convention], where everyone was complaining about a driver shortage and what were we going to do about it. With the economy the way it is, there is no lack of drivers now. And that's not going to change for the foreseeable future."
Mr. Moore said that it is a good thing but it has put a large number of inexperienced drivers on the road hauling produce, so there is some education that has to be done to teach these drivers about the challenges of hauling a perishable product.