3 MINUTE UPDATE: Key Transportation News.
July 6, 2022
Rate Flexibility is Key
The fluctuating and seasonal aspect of our industry also translates into changes in the quoting process. Gone are the days when shippers would ask for only annual or quarterly RFPs. Now, monthly quotes are more common with real-time rate quotes being the preference. Data shows truck freight prices have fluctuated greatly – up as much as 18.3% from the previous year.
Being locked in at the wrong time could mean either paying too much, or being on the other end, unable to find a truck to move your freight. At Simple Logistics, we have adopted real-time rate quoting to allow for a more accurate reflection of the markets. Customers and carriers rely on real-time data about the markets, fuel prices, and expect the same for their quote process. Having market awareness and data helps us navigate seasonal trends – especially in the produce industry.
Produce Volumes Are Down
Typically, May will see a surge in produce imports from Mexico and reefer transportation across the U.S. But, as we head into summer, the produce season may not pick up the same volume that we would expect in previous years. According to the USDA, volumes in cold storage are down 13% year-to-date (YTD) compared to pre-pandemic years or around 1,600 fewer reefer truckloads YTD. So, what is going on with our favorite fruits and veggies? Supply chain disruptions have impacted inventory levels this year.
Consumers are still willing to pay for quality produce even though inflation has prices up +8.7% per unit basis compared to last year. Fruit has had double-digit inflation over the last year, but people are still making purchases. Families still need their favorite produce for their summer activities and meals! (Fun fact: a 2021 survey by Statista showed that bananas are American’s favorite fruit and strawberries came in second place.)
- Fuel prices: Government officials are considering limiting exports of fuel in an attempt to control prices as gasoline prices are over $5 per gallon. Gasoline exports average 755,000 barrels a day so far this year, according to the U.S. Energy Information Administration.
- Tonnage: For-Hire Truck Tonnage decreased 2% in April but the 2022 year-to-date tonnage was up 2.3% compared to the previous period.
- Economy: May retail sales were down slightly (.3%) but 2022 has seen an 1% annual gain. However, this growth rate is below the May inflation rate of 8.6%. Inflation expectations, as estimated in the consumer survey conducted by the New York Federal Reserve in April, moved down from 6.6% to 6.3% on the one-year horizon, and to 3.9% in the longer term. 
Talk with one of our freight experts and get a real-time rate quote for your next shipment. Visit us at SimpleLGX.com or call 630-385-7400.
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