Heated produce season may further freeze capacity
Heated produce season may further freeze capacity
This summer is shaping up to deliver a very strong season for produce. With capacity as tight as it is now, many industry leaders are speculating that any difficulty in sourcing refrigerated trailers may impact the dry van segment as well, considering the ongoing effort supply chains are making to replenish inventory amid freight network imbalances.
“Currently, there is no indication of either demand slowing or supply increasing,” said Sean Burke, chief commercial officer at Echo Global Logistics. “It looks like we’re going to be in a continued tight-capacity, high-demand environment for the foreseeable future.”
According to an Echo white paper survey, produced in conjunction with FreightWaves, nearly 50% of respondents said they believe demand for refrigerated trailers during produce season will slightly affect dry van and flatbed capacity, while close to 25% think its impact will be significant.
FreightWaves’ Outbound Tender Reject Index shows just how tight things are across the board for the reefer, dry van and flatbed segments. But refrigerated freight has held the distinction as the tightest for nearly a year, with rejections hovering above levels seen amid 2018’s infamous capacity crunch.
“Many factors make it hard to predict how the 2021 produce season will play out. This year tight market conditions, coupled with the produce market, may further constrain transportation networks. It is important for shippers to monitor how current issues may magnify the typical challenges of the season,” Burke said. “In a constrained market, lead time such as shipment volume forecasts and adequate pickup or delivery appointment availability is critical to optimizing transit while limiting additional bottlenecks.”
Burke urges shippers to factor in longer lead times when sourcing trucks, ship as early as possible, build flexibility into delivery dates and consider alternative transportation options if necessary.
Findings from the white paper concluded that the regions with the tightest capacity at the height of their respective produce seasons were by far Florida and California.
But Burke’s eyes are on California and Texas this season. He suggests that Florida’s season is beginning to flatten, noting the decline in outbound produce loads as the reason why fewer and fewer carriers are heading to the Sunshine State.
Burke gives Southern California specifically the nod due to its economy’s slow recovery from the pandemic, in addition to its long-term COVID-19 restrictions just recently being lifted. He also noted that backlogs at the ports of Long Beach and Los Angeles haven’t helped either.
For large events drawing capacity to a single location, Burke said it’s typical for those events to have reverberating effects elsewhere in capacity networks; current imbalances this year have made it sting harder than in years past.
“Last year’s produce season was pretty abundant, but because you had so many shutdowns throughout the country [restaurants, etc.], we didn’t quite feel the effects to the same extent that we have this year,” Burke said. “We began with such a tighter constrained market this year that any incremental addition has felt bigger than last year. The market conditions just weren’t this tight last season, so it feels a lot tougher this year and quite frankly a little bit tougher than the last several years for produce.”
He added that it’s hard to gauge just how much tightness in places like Southern California or Texas can be exclusively tied to produce because of the tightness already gripping the market in those areas. For instance, Burke mentioned that Texas’ tight market can be attributed to February’s crippling winter storms in addition to produce season.
“Those who try to time the market perfectly usually end up disappointed,” Burke said. “I think the most important things shippers can do is to be very clear about what their rate expectations are and provide really good forecasts as to what they expect volumes to be throughout the year,” Burke said, adding that service expectations should be clearly conveyed on prime tender acceptance and that all stakeholders should have access to the same data to analyze.
Making sure each part of a supply chain is on the same page isn’t an easy task, but it’s absolutely essential in the fast-paced digital age.
Echo boasts an impressive suite of proprietary technology to simplify transportation management for all stakeholders, utilizing artificial intelligence, machine learning and advanced load-matching algorithms.
EchoShip is an innovative, self-service web portal that consolidates and simplifies shipping by enabling Echo’s clients to quote, book, ship, manage invoices and track shipments in real time. With its simple, user-friendly interface, EchoShip eliminates repetitive workflows and speeds up shipping with an efficient, four-step process, giving Echo’s clients time back to focus on their business.
Carriers too can stay in the loop with EchoDrive, Echo’s proprietary web portal and mobile app that gives carriers real-time access to search, bid, book, manage, track and get paid on freight hauled for Echo. The platform’s load management tool and document upload capabilities streamline operations, keep dispatchers organized and help drivers get back on the road faster.
“We use our technology to drive productivity not just for ourselves but also to provide transparency and visibility for our clients and carriers,” Burke said. “Our solutions are backed by real people and 24/7 support. Echo is always a phone call or email away anytime our clients or carriers need an expert to talk to — we’re here for them.”
Burke praised Echo for its technology’s ability to span multiple business verticals. However, what truly sets Echo apart is its communication skill set and ability to collaborate with clients, listening to their supply chain needs to develop individual transportation solutions. Whether it’s one shipment or a client’s entire freight network, Echo ensures each order is expertly transported by one of its 50,000 carrier partners.
“When the market is experiencing rapid change and ever-tightening capacity, having a trusted partner with a large carrier reach and access to capacity is critical. This is what really differentiates Echo from the competition,” Burke said.
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22 July 2021, 15:00