From its Visalia, CA, office, Sierra Agricultural Transportation Inc. focuses most of its attention on securing eastbound rates for its perishable clients in California and Arizona and up the West Coast into the Northwest.
“We go to all points east,” said Transportation Manager Chad Lenaburg. “We do a lot of business in the Northeast and the Southeast as well as Texas.”
He said that almost all the work the firm’s three truck brokers in that office secure is perishable freight. But at least one of the three does do a little dry-freight business when the opportunities arise. “If it’s profitable, we will book it,” Mr. Lenaburg said.
He noted that about 60 percent of the company’s business is spot-market deals with the other 40 percent being contracted service. Contracted service has been growing in recent years, but the Sierra Ag Transportation executive is not certain that trend is going to continue. He indicated that it is very difficult to predict the rates that are going to prevail several months in advance, so it is hard for either side — the trucker or the customer — to commit to a set rate in the future. Of course, if the rates skyrocket, the trucker is upset for hauling at a lower contracted rate, and the customer gets bent out of shape if the contracted rate is higher than the spot market rate on any given load.
As a case in point, Mr. Lenaburg said the truck rates predicted for this summer never materialized. “We had crazy weather out here that caused everything to be late, and we didn’t have the volume until just the last month or so,” he said in mid-August.
While there were predictions in the spring of rates topping $10,000 during the height of the summer, Mr. Lenaburg said that did not happen. “We were tight right around the May holiday (Memorial Day), but then things loosened up and we’ve had more equipment than we thought we would have.”
He said that fuel rates did not climb as high as expected, and the lower volumes combined to make for a fairly consistent deal all summer.