Overcoming Spring Freight Challenges

Plant Shipping Racks

Here we are again, with spring upon us as well as the worst freight market in modern history. What do I mean by “worst in modern history?” In the trucking and logistics world that I live in, we are experiencing the toughest capacity crunch in more than 50 years. It is a perfect storm of driver demographics, government regulations, lack of financing and shippers willing to pay top dollar to move their freight. Let me explain.

Driver Demographics
Drivers are leaving the workforce faster than ever before. Many trucking companies are paying sign-on bonuses of up to $10,000 for drivers to change companies rather than allowing the truck and trailer to sit idle. Unused vehicles cost the trucking company money. As a whole, our workforce is getting older, and the drivers aren’t necessarily the youngest (nor the fittest) bunch.

Moreover, strict immigration laws and government regulations have virtually stopped foreign drivers from entering the business. These days it is impossible to hire over-the-road drivers without the proper paperwork and legal status. Sadly, many of the Hispanic drivers and foreign nationals are some of the hardest working people. They have a hunger to succeed for their families. Without access to this potential pool of drivers, the driver shortage will get worse for the next 20 years as the population in the United States ages.

Government Regulations
I am not a big fan of government regulations that “sweep” across an industry wreaking havoc. Case in point: Recent changes from the Federal Motor Carrier Safety Association, the “safety arm” of the Department of Transportation, caused the average cost of a new truck and refrigerated trailer combo to rise from around $90,000 a decade ago to $135,000 today.

The reasons for the price jump include cleaner burning engines, safety equipment and an increased materials cost from steel, aluminum, rubber and other input components. I don’t know many pieces of equipment that cost 50 percent more over a 10-year span.

The government also keeps reducing the number of available driving hours for a driver under the guise of “safety.” In fact, the recent FMSCA regulations passed on January 2, 2012 mean available driving hours will be reduced by about 3 percent nationwide. Add this to the new DOT Safety Measurement System (SMS), and this pushes capacity shortages to around 10 percent. That means 10 percent fewer trucks and drivers will be available due to the government’s attempts to “make trucking safer.” Even without the new regulations, driver fatalities have decreased in the last nine out of 10 years.

Lack Of Financing
Imagine you have a truck and trailer, and it is at the end of its maximum natural life. For a truck and trailer, that is about 10 years, depending on miles driven (and its use). However, most owners will tell you that after five or six years, the maintenance costs rise so fast that it is better to trade the old equipment for new. Also, older equipment does not meet many of the latest emissions laws, which forces truckers to either upgrade or to buy new.

Unless you can pay cash, you likely need to finance your new equipment, whether buying or leasing, from a dealer or a bank. Financing is nearly impossible unless you have 30 percent cash to put down on each unit and a solid 5-year profitable operating record. And you aren’t the “mom and pop” operator that banks don’t have time for.

Many truckers cannot upgrade their equipment, so more and more are parking their trucks when they get too old to run efficiently – further reducing available trucks to take your loads. In our industry, we don’t foresee the financing picture changing any time soon.

Shippers Willing To Pay
When we talk to our growers, this is the conversation that has the highest “aha” factor for them. Simply put, the higher the commodity value being moved, the less important shipping costs are. For example, a shipper moving a trailer load of $150,000 worth of chicken tenders 1,000 miles is easily able to absorb an extra $1 per mile on the load (or .67% of the loads value). Spread across all those cases of chicken tenders, the extra $1,000 in freight is small. By the time you buy the package of chicken tenders at the store, this extra freight is so small that I don’t think my calculator will register the percentage.

On a load of plants, however, $1,000 in added freight charges may be the difference between a profit and a loss for you. So, as you can see, other shippers have a far greater ability to pay extra to “get the truck” without the blink of an eye – leaving fewer available one-way trucks for growers to access.

So, is there anything positive to say? Is Tim Higham being Chicken Little, saying the sky is falling? There are some things that may help the situation.

Work Together
Customers are more willing to listen and to help with freight challenges. Plenty of large wholesalers and retailers have sophisticated freight departments that are fully aware of where capacity stands and how rates have been increasing. Rising input costs (of all kinds) need to be addressed openly and honestly in order for both parties to prosper. No buyer needs a bankrupt vendor. Ever.

Get Tech-Savvy
The growers who continue to move freight with white boards, paper and, perhaps, a spreadsheet, will lose. You cannot run an efficient distribution program without embracing the technology available to you. The growers that are moving forward are those that become more efficient through the careful implementation of Transportation Management System (TMS) technology. Today, all you need is an Internet connection and a browser to access these TMS systems. No “propeller heads” required.  

Pay Truckers – Fast
Many truckers are hanging on by a thread. If you are willing to give them an advance for fuel and to pay them the day the load delivers, you will be more likely to secure the truck – even if your rate is inferior. Let’s face it, multi-stop plant loads are not the cream of the crop when it comes to driver choice. It is a fact we have to live with. But, if a driver knows you will pay him immediately, it is likely he will give you a shot – and then come back for another load if all goes well and he or she is paid upon delivery.

Spring is hard enough for our industry without more trucking headaches. But, in the end, all the loads will get moved on some day by some driver at some price. The key to minimizing your chances of heart failure is being prepared today and taking the appropriate action. So, talk to your logistics manager, show them this article and help make your spring go more smoothly than the nursery down the street.   

Leave a Reply

2 comments on “Overcoming Spring Freight Challenges

  1. Company drivers need to be paid for ALL hours on the job. A new pay stucture is in order NOW. Paying "cents per mile" is from the 50's. Everybody is internet savvy today and can READ right here what a RIPOFF the trucking industry is. The money is CRAP when you figure you are cramped into a "home on wheels" with No Running Water, Cooking, Crapper….its more like some Chinese Torture! These Millionaires can Pay for our Meals too!

  2. Mike, and that is one reason trucking is harder and harder for us growers. No drivers want the job at the cruddy rates and the growers cannot increase rates as most of us are being squeezed to extinction!

More From State of the Industry...
Cultivate'14 GG and TGC Booth

July 7, 2015

Join Greenhouse Grower And Today’s Garden Center At Cultivate’15

Greenhouse Grower and Today's Garden Center are excited to take part in Cultivate'15. We have a lot going on in our booth, and we hope you will be there to join us as we celebrate careers in horticulture and honor the industry’s top growers, breeders and marketers.

Read More
BeeSmart logo

July 7, 2015

Grow Wise, Bee Smart Website Launches As Industry Resource On Pollinator Health

The new Grow Wise, Bee Smart website, growwise.org,  was recently launched as a key component of the horticulture industry’s Bee and Pollinator Stewardship Initiative, which was created to provide leadership and guidance to the industry on pollinator health. The site serves as the communications hub for the latest research and developments related to the role horticulture plays in supporting pollinator health. Grow Wise, Bee Smart currently features information on the importance of bees and pollinators, threats to their health and steps everyone can take to improve habitat and forage. Links to the Million Pollinator Garden Challenge and Pollinator Partnership further guide retail and landscape firms and their customers on how to plant and register new gardens and habitats for pollinators. As the Grow Wise, Bee Smart stewardship program for plant production is launched, and as funded and directed research yields results and guidance, the site will feature timely new information and insights. Progress […]

Read More
The-Capitol

July 7, 2015

Washington Gridlock Could Block Industry Research Funding

The latest standoff on Capitol Hill could have some implications for the floral industry, including future funding for floriculture and nursery research initiative activities, says Shawn McBurney, SAF’s senior director of government relations. “Republicans in the House and Senate are determined to work within the sequester-imposed limits for domestic spending in the federal budget, but Democrats have threatened to block any appropriations bills until Republicans agree to spend more money than that agreement allows,” McBurney says. “With both sides digging in, there could be an impact on budgets that affect programs and services important to the floral industry.” The back and forth over spending limits isn’t new, McBurney says. In 2013, then-Budget Committee Chairmen Paul Ryan (R-Wisc.) and Patty Murray (D-Wash.) negotiated an agreement that increased spending levels for defense and nondefense discretionary spending equally above the sequester level for two years, offset by fee increases and changes to mandatory […]

Read More
Latest Stories

June 30, 2015

Opportunities Abound For Women In Horticulture, Says Do…

My love for horticulture goes back to my grandparents who were farmers in upstate New York. My family’s involvement in agriculture left a lasting impression that has spanned decades, and still drives my passion for our industry today. I started my career in horticulture when I owned a greenhouse, nursery and garden center in Sayville, Long Island, N.Y. We specialized in ground cover production, later branching out to producing perennials and bedding plants.     I then went onto wholesale hard goods distribution. In the 1980s, I was the first woman salesperson on Long Island. What an eye opener that was! New York is a very special place, different from anywhere else in the country. You cannot imagine how difficult it was walking into greenhouses and nurseries as a woman, in a man’s world. Luckily, I grew up in New York City in an Italian family, who taught me great […]

Read More

June 10, 2015

Women In Horticulture Should Celebrate Their Difference…

Maria Costa-Smith, executive vice president at Costa Farms in Miami, Fla., says she believes in equal treatment for equal work. She encourages women in horticulture to work hard, be team players, perform beyond expectations and add value to their organizations. Fulfilling Her Dreams Maria Costa-Smith grew up in the horticulture industry, and never doubted that she wanted a career in ornamental horticulture. Part of a family with a history steeped in agriculture, her grandfather, Jose Costa, was a farmer in Cuba, who sent her father, Tony Costa, to the University of Florida just before the Cuban Revolution to study agriculture. When the family uprooted in 1961 and fled to the U.S., they began growing tomatoes and citrus on a 30-acre plot of land in Miami, and soon after expanded into ornamentals. Thus, Costa Farms was established. Working on the farm with her father and grandfather, Costa-Smith says she was always […]

Read More
Pollinator-Conference-NC State

June 10, 2015

Experts Convene to Discuss How to Protect Bees, Other P…

A new conference organized by North Carolina State University (NC State) and Michigan State University (MSU) will focus on the need for bee-friendly ornamental landscapes and practical solutions for protecting bees and other pollinators. This autumn, researchers, educators and industry experts from around the country will descend on a small town in rural North Carolina to discuss a question with repercussions for both the economy and the environment: what can be done to protect bees and other pollinators? The conference is focused specifically on what can be done to not only conserve but also bolster pollinator populations in so-called ornamental landscapes, such as urban areas and manicured gardens. It is the brain child of two entomologists – Steve Frank of NC State and David Smitley of MSU. With pollinator declines in the news, public demand for bee-friendly ornamental plants is high, but much of the available research has addressed pesticides and […]

Read More
Terri McEnaney Bailey Nurseries headshot_featured

June 3, 2015

Bailey Nurseries’ Terri McEnaney Recognized By Mi…

Bailey Nurseries President Terri McEnaney was recently honored by the Minneapolis/St. Paul Business Journal in their Women in Business 2015 special issue. Those honored were chosen for the impact they have had on the business community in Minnesotoa, as well as their dedication to serving their community. McEnaney was honored for her leadership in growing the company significantly in terms of revenue, staff, global reach and brand development, as well as her strategic acumen and industry insight. Other honorees included executives from U.S. Bancorp, PricewaterhouseCoopers, Gilette Children’s Specialty Healthcare, the American Cancer Society, Cargill, 3M and Wells Fargo. “I am humbled to receive this honor from the Minneapolis/St. Paul Business Journal,” McEnaney says. “To be among this group of esteemed women is exciting. Seeing successful female leaders in other male-driven industries pushes me to continue working and encouraging women in horticulture to grow their passion into a long-term, fruitful career.” […]

Read More

June 3, 2015

Take Greenhouse Grower’s 2015 Spring Recap Survey

Please take a few minutes to answer Greenhouse Grower’s 2015 Spring Recap Survey. Your input will help us get a firmer grasp on how spring played out for growers and what we can expect in Spring 2015.

Read More
Bee on a Sedum

June 3, 2015

The Million Pollinator Garden Challenge Launches With U…

The National Pollinator Garden Network (NPGN) launched the Million Pollinator Garden Challenge on June 3, just in time for National Pollinator Week, held June 21-25. The Million Pollinator Garden Challenge is a strategic effort to promote and protect the needs of pollinators in North America. Representatives of the recently formed Network joined First Lady Michelle Obama on June 3 for an event that’s part of her “Let’s Move” Initiative at the White House, to formally launch the Challenge. The launch of the Challenge is an unprecedented collaboration by dozens of conservation and gardening organizations, including green industry associations like AmericanHort, America in Bloom, Society of American Florists, American Floral Endowment, the National Garden Bureau and the American Horticultural Society. The organizations joined together to form the National Pollinator Garden Network and launch the new nationwide campaign – the Million Pollinator Garden Challenge. Designed to accelerate growing efforts across America, the Network is launching the […]

Read More
Status of Marijuana US Map May 2015

May 29, 2015

Marijuana Legalization Updates

As of April 2015, 23 states and the District of Columbia (D.C.) currently have laws legalizing marijuana in some capacity. At the federal level, several bills are currently awaiting action. Here is an update on current state and federal marijuana legislation across the U.S.

Read More
cannabis, marijuana plant

May 29, 2015

Making The Decision To Produce Medical Marijuana

Should horticultural growers consider cultivating medical marijuana? That’s up to the individual grower, of course, and certainly a number of growers already have jumped in. We at Meister Media Worldwide, publishers of Greenhouse Grower and American Vegetable Grower, do not necessarily endorse nor oppose the production of medical marijuana. But we do feel it is an option worth exploring. We intend our “Medical Marijuana” series of articles to give you information you need to make your own call. We hope you find it useful, and we do welcome your comments, thoughts and ideas as we continue to cover what we’re fairly certain is only going to be an increasingly viable and growing market for this emerging crop.

Read More
water

May 27, 2015

California Growers To Voluntarily Cut Back Water Use

Farmers in the Sacramento-San Joaquin River Delta have agreed to reduce their water use by 25 percent in exchange for assurance that they will not face further curtailment during the June-September growing season. The proposal was approved by the State Water Resources Control Board on Friday, May 22. “This proposal helps Delta growers manage the risk of potentially deeper curtailment, while ensuring significant water conservation efforts in this fourth year of drought,” State Water Board Chair Felicia Marcus says. “It allows participating growers to share in the sacrifice that people throughout the state are facing because of the severe drought, while protecting their economic well-being by giving them some certainty regarding exercise of the State Water Board’s enforcement discretion at the beginning of the planting season.” Growers who participate in the program could opt to either reduce water diversions under their riparian rights by 25 percent, or fallow 25 percent of their land. In both cases, the […]

Read More
Farwest2015

May 20, 2015

2015 Farwest Show Announces Second Annual Equipment Inn…

The second annual Equipment Innovation Day will be Tuesday, Aug. 25, prior to the 2015 Farwest show, which will be August 27-29 in Portland, Ore. Equipment Innovation Day, which was enthusiastically received in 2014, offers a real-time opportunity to see new heavy and automated nursery equipment in action. The demonstrations take place in manufacturing and nursery settings, adding value to the showcase. Attendees will be able to talk with participating manufacturers and learn first-hand from innovative growers who use the equipment in daily operations. The day-long event will be held at the main manufacturing plant of GK Machines, Inc., Donald, Ore. Further demonstrations of field equipment will take place at the nearby nursery of A&R Spada Farms, LLC. Bus travel to and from the event is planned, starting at and returning to the Oregon Convention Center. Attendees are welcome to provide their own travel to and from the site. Preregistration is required. The cost […]

Read More
CCGGA-Scholarship-Winners

May 20, 2015

Central Coast Greenhouse Growers Association Awards 201…

The Central Coast Greenhouse Growers Association (CCGGA) is awarding 20 scholarships this year to high school and college students. CCGGA-member nurseries raised money for the scholarship fund and each donated a portion of the fundraising sales to the fund, which is open to students currently enrolled in college for the following year. The scholarship program is also available to students of employees who work at CCGGA-member nurseries One of the organization’s goals is to continue encouraging future generations to enter the horticulture field and to promote higher education within the families that work in the local nursery business. The 2015 CCGGA scholarship recipients are: Aloysia Shea – Nipomo High School Andrew McHaney – CSalinas High School Angel Flores – Righetti High School Beatriz Barajas – San Jose State University Carolanne Garibay – Monterey Peninsula College Cladia Lavina – Salinas High School Erica Marquez-Ibarra – San Jose State University Jorge Zarate […]

Read More

May 18, 2015

Download Greenhouse Grower’s 2015 Top 100 Growers…

Greenhouse Grower‘s Top 100 Growers Survey revealed that our projections in the 2015 State Of The Industry report were correct: Growers, at least the large ones, are expanding. Greenhouse Grower’s annual Top 100 List ranks the largest U.S. growers by total square feet of environmentally controlled greenhouse space, although this year, we have also listed shade and field acreage, to give perspective on how large these operations are beyond the greenhouse. In total, the 2015 list represents 228,906,001 environmentally controlled square feet of U.S. production, a 5 percent increase over 2014. All told, 26 growers reported that their operation grew between 2014 and 2015. Several growers reduced their production over the past year, as well, and while some operations’ downsized numbers were significant, most were slight and probably typical of the give-and-take in the horticulture industry. Greenhouse Grower‘s 2015 Top 100 Growers Whitepaper includes all the results of the survey, […]

Read More
USDA Logo

May 13, 2015

New Report Shows College Graduates With Agriculture Deg…

A new report from the USDA shows high demand for recent college graduates with agriculture degrees, with an estimated 57,900  high-skilled job openings annually in the food, agriculture, renewable natural resources and environment fields in the U.S. According to an employment outlook report released by the USDA’s National Institute of Food and Agriculture (NIFA) and Purdue University, there is an average of 35,400 new U.S. graduates with a bachelor’s degree or higher in agriculture related fields, 22,500 short of the jobs available annually. “There is incredible opportunity for highly-skilled jobs in agriculture,” says Agriculture Secretary Tom Vilsack. “Those receiving degrees in agricultural fields can expect to have ample career opportunities. Not only will those who study agriculture be likely to get well-paying jobs upon graduation, they will also have the satisfaction of working in a field that addresses some of the world’s most pressing challenges. These jobs will only become more […]

Read More
USDA Logo

May 6, 2015

USDA Awards $10 Million In Grants To Universities To Ad…

More than $10 million has been awarded to U.S. universities to address critical water problems, such as water quality and availability, in rural and agricultural watersheds across the country. The awards were made through the U.S. Department of Agriculture’s National Institute of Food and Agriculture (NIFA) Agriculture and Food Research Initiative (AFRI) Water for Agriculture challenge area and the National Integrated Water Quality Program (NIWQP). “Water is our most precious resource, one that is essential for both human survival and well-being and for our ability to grow our crops and livestock,” says Sonny Ramaswamy, NIFA director. “By funding research, Extension and education for citizens and the agriculture community, we are able to proactively create solutions to water-related issues like drought and its impact on food security.” The AFRI Water for Agriculture challenge area was first introduced in fiscal year (FY) 2014, and these grants represent the first year of funding for the program. Funded […]

Read More
fngla

May 6, 2015

Florida Nursery, Growers And Landscape Association Name…

Florida Nursery, Growers and Landscape Association (FNGLA) has awarded a group of individuals through its FNGLA Industry Awards Program for their contributions to the industry. This year’s winners will be honored during FNGLA’s Annual Convention in Coral Gables on June 13, as part of FNGLA’s Annual Meeting. FNGLA’s Industry Awards Program acknowledges both FNGLA and industry service, with varying criteria geared for each award. Nominations are accepted from the industry-at-large and winners are selected by a committee of industry peers. The Wendell Butler Award and the FNGLA Hall of Fame are recognized as the most prestigious awards given by FNGLA. The Wendell Butler Award is presented for service to FNGLA and the FNGLA Hall of Fame Award is a lifetime achievement award. Nominations are accepted from the industry at large. FNGLA Hall of Fame Inductee: Hugh Gramling, Tampa Bay Wholesale Growers (Plant City, Fla.), retired Wendell E. Butler Award: Theresa & Kevin Riley, […]

Read More
water

May 6, 2015

Record Low Snowpack Continues In The West

Across the Western U.S., snowpack has melted sooner than usual, according to data from the fourth 2015 forecast by the United States Department of Agriculture’s Natural Resources Conservation Service (NRCS). “Almost all of the West Coast continues to have a record low snowpack,” NRCS Hydrologist David Garen says. “March was warm and dry in most of the West; as a result, snow is melting earlier than usual.” Historically, April 1 is the peak snowpack. This year, the peak came earlier. There was little snow accumulation in March, and much of the existing snow has already melted. “The only holdouts are higher elevations in the Rockies,” Garen says. “Look at the map and you’ll see that almost everywhere else is red.” Red indicates less than half of the normal snowpack remains. A consequence of the early snowmelt is that Western states will have reduced streamflow later this spring and summer. In Western states where snowmelt […]

Read More
RedPeppers_RosanaPrada_Flickr

April 29, 2015

Nature Fresh Farms To Build 175-Acre Greenhouse Facilit…

Growing fresh vegetables in the Midwest is about to take a major turn in a new direction as Nature Fresh Farms has announced a large-scale investment in northwest Ohio. The company broke ground on April 10 to begin construction on a 175-acre greenhouse facility in Delta, Ohio. “This is an exciting time for Nature Fresh Farms as we expand our operations to include a U.S. growing facility,” said Nature Fresh Farms President Peter Quiring in a press release. “This development will allow us to better serve our Ohio customers with locally grown produce, year-round and continue to grow our U.S. operations.” Contingent upon acceptable levels of incentives from the State of Ohio and other government authorities, as well as utility rates agreeable to Nature Fresh, the company would be poised to ship its first case of vegetables in December 2015. The greenhouse project will be completed in several phases over the […]

Read More
RISE logo

April 29, 2015

RISE Delivers Petition Urging President Obama To Protec…

Responsible Industry for a Sound Environment (RISE) delivered a pollinator petition to the White House Council on Environmental Quality, urging President Obama to create more habitat and forage areas for pollinators, and to consider all sources of information on, and contributors to the pollinator health issue. Nearly 600 citizens from across the U.S. signed the petition. “Our petition shows President Obama that citizens want a balanced and substantive conversation to happen on the pollinator health issue,” says Aaron Hobbs, RISE president. “The pollinator issue is very complex and research points to multiple factors affecting pollinators, including pests and parasites, microbial diseases, nutrition problems, bee management practices and climate change.” According to Hobbs, the petition highlights some of the steps the industry is taking to support pollinators. This includes creating pollinator-friendly habitats and forage areas through integrated vegetation management in utility rights-of-way and large tracts of land. “We do applaud the White House for including in […]

Read More