Apr 12, 2018USDA releases report on truck shortage and record high rates
As potato shippers across the country know, trucks are hard to come by and very expensive. According to the Northern Plains Potato Growers Association the inability to find timely transportation has cost fresh shippers in the Red River Valley millions of dollars, not only in lost sales but dropping prices and higher shrink as the supply of potatoes backs up in storage.
Over the last several years, the combination of overall economic growth and ongoing driver shortages has contributed to diminishing capacity in the trucking industry. This situation peaked at the end of 2017 and beginning of 2018, as additional factors contributed to record high truck rates and widespread shortages across the trucking industry. Spot rates for some refrigerated trucks reached 40-year highs, according to a report from the USDA’s Specialty Crops Market News division.
The 31-page report provides background and context to shed light on the factors contributing to these record high rates and the driver shortage.
The report concludes that increased annual volume, from strong economic growth, was felt across all modes of transportation such as ports, railroads and intermodal. However, trucking is experiencing the greatest impact, both as the primary mode of transportation and as the critical link in the first -mile/last-mile segment of the intermodal supply chain. The amount of U.S. economic growth has outpaced the gains in the number of truck driver jobs added over the last seven years, despite the number of truck drivers fully recovering to its prerecession level.
Further, the report warns that sustained economic growth in 2018 could continue to put pressure on truck rates and capacity and that with diminished excess capacity in the system, any disruptions to the supply chain could be widespread.