All shippers know their business depends on that particular time of the year. A busy produce season means a lot of work, and with it come challenges like scheduling constraints, increased rates but most importantly, tightened capacity. The relationship between produce and seasonal capacity is very important simply because produce season greatly impacts rates.
How Produce Season Impacts Rates
Produce season is a certain period of the year when shippers have a significant increase in demand, as they need to ship the products to vendors and manufacturers across the country.
Because of this volume increase, time is of immense importance, especially when it comes to shipping refrigerated products. Volume increase also impacts the demand for transportation. High demand means that available capacity shrinks.
Since produce season is the most lucrative time for shippers and carriers, most companies will set their course to where demand is the highest, but there's a problem with that: those shippers in regions with low demands are experiencing higher rates due to capacity shortages.
So, as you can see from all this, produce season, rates, and capacity are all closely related. The higher the capacity demand, the higher the rates.
How Produce Season Impacts Capacity
As the produce season progresses, it tends to consume all the available truck capacity on its way. It's important to mention that load-to-truck ratios greatly depend upon the produce season, which poses a real challenge for shippers. They need to stay focused on all the available harvest schedules while on the go.
Most shippers rely on the USDA's crop reports to pair it with the relevant information regarding truck rates, market news, and so on. This information is crucial to keep their expenses in check when the peak season kicks in. Now, keeping up with the harvest schedules is only one part of the puzzle.
The other part is the understanding of volumes, as this matter greatly. Demand for shipping significantly impacts the volumes, as high demand means low capacities. Available capacity shrinks as demand rises and the direct result of that relationship are higher rates.
Keeping Costs in Check
It's never easy to control costs, especially during peak produce season. A few good ways would be to start negotiating contracts, analyzing rates and studying harvest schedules early to come up with a customized transportation solution that will give your shipping company some leverage against your competition.
It's essential to make the most out of the regional capacity strength in order to keep the shipping costs under control. When the produce season kicks in, it's important to be prepared in advance to prevent things from going downhill.
For assistance this produce season, reach out to JRC Dedicated Services today!