The Cantaloupe Conundrum
Freight markets share the same supply and demand oscillation as any basic example in entry level economics. Supply and demand dictate the massive price swings that subvert dry market pricing during produce season and create new lane opportunities in tandem with the need to reevaluate existing ones. Year after year we recognize the symptoms in late March, early April. The market of 2017 presents a new conundrum: produce season is not yet here and the freight market is in a stalemate. April yields more questions than answers in 2017’s new Trump economy as produce, driver capacity and equipment capacity tighten. The industry continues to hold their breath as it faces diminished crops due to unusual freezes, DOT regulations looming ahead in November, and truck manufacturers diminishing production due to lack of demand. All of these facets of the industry create our current predicament of unpredictability.
Markets are never constant, but humans do follow discernible patterns that enable us to make coarse predictions. This year in the wake of unpredictability, brokers and carriers alike face pricing difficulties which illuminate several hard truths. The first truth centers on melons. Melons are the alluring golden goose of Florida freight that drive prices down to nearly obscene levels with the promise of a profitable haul out. Winter of 2016/2017 killed a significant amount of crops including melon plants. The second issue is E-Log implementation. Many smaller owner- operators have shut their doors in 2017 and joined larger companies such as Landstar and Dolce in addition to those who chose to retire from driving entirely. The third perplexing trend is the tightness of the market. Usually they operate like a seesaw, expensive one way, cheaply another. Data is pooling more of an unchanging stalemate as opposed to the large fluctuations that occur.
The next question is going to be what will jump start our market and create the next swing? When will we see it again? Carriers and brokers are holding their breath on both sides yet the odd market stalemate shows no intention to move imminently.
Rachel L. Wolf
Transportation Broker, Charleston