High Freight Rates Costing Producers

Clint Thompson Florida, Georgia, Top Posts

By Clint Thompson

High freight rates and limited availability have created another challenge for Southeast vegetable producers. Neil Mazal, with East Coast Farms and Vegetables in Lake Worth, Florida, said freight rates are historically high and may contribute to a quick and unprofitable season for some growers.

“We’re in South Florida. Historically, I would buy a truck out of South Georgia to travel seven hours to my facility. Historically, those trucks would be $1,200 to $1,400. We’re now paying $2,200 to $2,400,” Mazal said. “Trucks from the west coming east, historically, with this time of year would be between $4,000, $4,800, even $5,000. They’re now asking $8,000 to $10,000 and as high as $12,000.”

Those high costs are expected to impact Georgia produce. Mazal said with South Carolina and North Carolina growers coming on the market with their crops, buyers in the Northeast will look at closer availability to save money. They will soon stop buying from Georgia.

Limited Availability

High freight expenses are just one aspect of it. Many producers are not able to find trucks to haul their produce in the first place. Mazal said if growers wait until Thursday or Friday to book a western truck coming east, there is almost no equipment available. Drivers are opting for less expensive ways to do business.

“Some of that has to do with dry freight. The Amazons of the world tying up refrigerated trucks and hauling dry freight in them. That saves the driver from having to run the refrigerated units, saves them on fuel costs,” Mazal said. “A lot of drivers are opting for that kind of freight because they’re getting big money for it. It’s a whole combination of events, but freight rates are probably the most impactful issue right now on delivered costs of fresh fruits and vegetables.”

It’s contributed to a suppressed market for vegetable growers. Supply is exceeding demand. Green peppers have dropped from a $20 FOB for single-X, double-X or jumbo size to around $16. Mazal predicts it will drop to $12 by Thursday or Friday.

“It really doesn’t return pick and pack to the grower. But it’s all being driven by a lack of demand,” he added.