Of course, these two industry veterans understand that complete transparency might be too high of a hurdle to jump in the fresh produce industry. Industry members believe they are uniquely independent and are really not that interested in sharing all of their data. Gowdy said CHR knows this will be an evolutionary process, which has already begun. He said the history of the WG/CHR program shows a great deal of technological advances over the last decade. “We are absolutely doing a much better job,” he said, noting that the data accumulated does allow for better positioning of equipment. He added that on a year-to-year basis trends are being analyzed and acted upon. But Loes said data science is changing industry after industry and there is no reason it wouldn’t do the same to the transportation of fresh produce. Ten days, 30 days, six months out, the industry should be able to better manage its transportation equipment needs, and shippers should be able to make smarter choices. He said Navisphere Vision is already performing some predictive tasks—like predicating the best route for a cross country trip taking into account, weather, traffic and other factors—but he has no doubt it will do more in the future. In the short term, CH Robinson is still adept at using some tried and true methods to forecast the needs of its clients. Gowdy said looking forward to the normal rise in fresh produce shipments in the spring and summer this year, it’s clear that there will almost certainly be some volatility. “There are macro indicators that supply and demand (of equipment) are not in balance. We are continuing to see an increase in demand, and for many reasons we see less supply of equipment.”
Currently, he said truck utilization is as close to 100 percent as you can get. So as there are surges in supply, there is a high level of certainty that there will be periods of shortages and high prices, especially on the spot market. Add in the regulatory components, including the electronic logging device regulation that will, in aggregate, decrease the number of trips for the average driver, and shortages can be predicted. He said the transition in supplies from the desert production areas of Arizona and California to the valleys of California will certainly result in surge volumes and probably surge pricing. Looking at the upcoming situation through the lens of what occurred when increased equipment demand took over after the hurricane, it is almost inevitable that shortages will occur. But Gowdy said CHR did learn from that event and is doing what it can to position carriers as effectively as possible. He said the best strategy for shippers is to align upcoming freight opportunities with capacity, which basically means committing shipments to specific carriers. He also commented on the many reports that truck orders are up significantly year over year leading to much speculation that supplies are catching up with demand. Gowdy said in the first place it takes a while for a truck order to get into commerce. These orders are placed by truck dealerships but the truck still has to be sold to a company or an individual and then get on the road. “We know there is a shortage of drivers. Just because there are trucks purchased, doesn’t mean the driver supply is there.” Ultimately, it could be a challenging spring and summer. It points again to the need for better predictive models so those challenges can be anticipated and met.
With 800 attorneys practicing in major locations throughout the U.S. and Puerto Rico, Jackson Lewis provides the resources to address every aspect of the employer/employee relationship. *Proudly working with Western Growers, agricultural and distribution industries for years Jonathan Siegel 200 Spectrum Center Drive, Suite 500 Irvine, CA 92618 949-885-1362 SiegelJ@jacksonlewis.com jacksonlewis.com
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