Thursday, November 4, 2010

Seasonal Shipping Issue ‘Crops’ Up

Flood of agricultural products monopolizes trailer capacity, puts ‘growing’ strain on pricing.

Have you been feeling the pinch? Every year, as the bulk of farm crops are harvested and shipped, a supply crunch hits the trucking industry. Perishable food items are extremely time-sensitive, and often must be shipped in temperature-controlled equipment.

With much of the produce coming from California, this puts great pressure on deliveries from the west coast, so imports from the Pacific Rim are strongly affected. Even shippers whose business has nothing to do with agriculture can find themselves scrambling for transport, and paying spot prices that are double, or more, compared to long-term agreements or the growers’ off-season. After the recent shakeout among carriers, leading to fewer trucks on the road, the squeeze is particularly tight now, and for the foreseeable future.

So, should you negotiate an annual contract to avoid paying peak rates at the toughest time of the year? Variables including geographical factors, your shipping patterns, and importance of guaranteed delivery schedules factor into the decision.

For volume shippers, the answer can mean a six-figure swing in long-haul transportation costs. Could your firm use help in “picking” the best option?

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