in freight pricing is, of course, demand. Raetz said that experts have estimated a three to four percent increase in truckload volume in 2022. “Another year of pretty good growth,” he observed. “We will have freight demand still in the marketplace if these forecasts are accurate.” He said this growth in volume will continue to create a tension on supply and keep truck rates high. Raetz said the truckload pricing forecast estimates a six percent year-over-year growth in 2022. The good news is that this is significantly less than the rate increases of the past two years. Rates in 2021 were 35 percent greater than in 2020. The less-than-stellar news is that in December the experts estimated truck rates would increase four percent. In just two months, that forecast has gone up 50 percent to six percent. Raetz warned that it still may be too low. The report about LTL service is not as relevant to produce hauls as the “driver” in that sector is often related to e-commerce and the package delivery process. For the most part, these are short distance or station to station hauls. This sector has dominated the increase in truck driver jobs, and it is most relevant to perishable cross-country hauling in that these employers can offer lifestyle benefits that truckers say they want—such as shorter hauls and less time away from home. These are advantages that local produce route haulers can compete against but not coast-to-coast carriers or shippers. While the produce industry is largely dependent upon independent owner-operators who specialize in cross-country
having to give rookie drivers 30 percent more than their new hires were receiving in 2019. The CHR executive added that the short-haul jobs are coming back at a much higher clip than the cross-country driving positions. In fact, he said the average length of haul was only 490 miles in Q3 of 2021 compared to 528 miles a year earlier. Raetz said the length of haul has been dropping for years as it was about 800 miles 20 years ago. Nonetheless, the 38-mile year-over-year drop was an unusually large decrease. The drop in length of haul over the past 20 years is mostly the result of supply chain redesigns, but the one-year seven percent drop shows that carriers are focusing on this driver lifestyle issue. Being away from home for days at a time has long been one of the major drawbacks of long-haul trucking. Unfortunately, is a very important and inescapable factor in a significant share of produce hauling. As far as equipment is concerned, Raetz said there is expected to be about a three percent growth in tractors in 2022 and a 12 percent growth in trailers. Chassis, which are used to haul sea containers and other similar equipment, have been in a demand exceeds supply situation, which is one of the elements causing delays at the ports. Raetz said one major chassis manufacturer is bringing a new plant on board late in 2022, which he called a good sign and points to continued investment in the sector. From that same overview perch, he said pricing of transportation is expected to continue to increase beyond historical norms through most of 2022. One of the major factors
MARCH | APRIL 2022
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Western Grower & Shipper | www.wga.com
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