As many growers coast to coast know, freight rates have spiked for produce shipments.
“Transportation costs have drastically impacted the celery market. There is a lot of pressure for lower FOB prices to make up for exorbitant freight costs,” says John Chobanian, commodity account manager with Castroville, CA-based Ocean Mist Farms.
Over in Scottsdale, AZ, Justin Bootz of Legend Produce LLC adds that there is a struggle currently to find trucks, even though rates are at all-time highs. “Two years ago in the time before COVID-19, you could find a truck going to the East Coast for maybe $6,000-$6,500. Now that same truck probably costs $10,000-$11,000,” says Bootz.
Lead time an issue
Part of the problem is the lead time involved when pulling quotes together for pricing. “We have to quote a customer to bid on the domestic season very far in advance. So when we’re figuring out what our delivered costs are going to be, we have to get estimates from the freight companies months and months in advance and they’re doing their best guess,” says Bootz. He adds that when it comes time to get those programs going months after that initial quote, carriers are reporting they can’t load goods at the same rates previously quoted because it’s costing an additional $2,000-$3,000 on top of the quote. “Gas prices are also going up and there are also driver shortages. The freight has never really come down or stabilized even since COVID,” says Bootz.
This is on top of a number of other cost-related issues growers are contending with coming out of the pandemic, including the increasing costs of packaging and shipping materials such as pallets. “But looking ahead, our biggest issue this season is going to be the historically high freight rates,” says Bootz.