The summer transportation season was active with good, strong rates at numbers allowing truckers to make a decent living. At least that was the view of a couple of New York truck brokers surveyed on the subject in mid-August.
“May, June and July were super busy,” said Lance Dichter of LD Logistics, based in the Bronx, NY. “August has fallen off a bit but we had a good strong summer.”
Paul Kazan, president of Target Interstate Systems Inc., also headquartered on the Hunts Point Terminal Market in the Bronx, agreed.
“We scratched the ceiling at $ 10,000 in May, which was too high,” he said. “All summer the rate has been hovering between $ 7,000 and $ 8,000. It has been good business. Everybody seems to be within $ 100 to $ 200 of each other so no one getting a big competitive advantage and truckers are able to make a living.”
Both men had just read an article in the New York Times a few days earlier lamenting the shortage of truck drivers. Both agreed it could be a long-term problem as the economy heats up and truckers have other options.
“It’s a tough way to make a living,” said Kazan. “It’s not a 9-5 job. When rates are low, these guys are better off slinging hamburgers at McDonald’s. But the rates this summer have been pretty good.”
Dichter said it does take a certain type of individual willing to be away from his family for so many days in a row. He said cross-country trucking is difficult and is susceptible to driver shortage situations. “But from Florida (to destinations up the Eastern Seaboard) you are only away for a day or two and you can make a pretty good living.”
The New York Times article said driver pay has not kept up with inflation and many workers are finding jobs elsewhere. However, the article said fleet operators are starting to pay better wages and even $ 2,000 signing bonuses to attract new drivers. The article suggested that truck driving may be one profession where blue collar workers can gain the upper hand in negotiating for better rates because of a lack of drivers. Most blue collar and unionized workers have seen their wages fall, adjusted for inflation, over the past seven or eight years.
The article focused on fleets and didn’t specifically discuss independent owner-operators of refrigerated trailers that form the backbone of the fresh produce industry. Both Dichter and Kazan indicated that the produce transportation industry still operates largely under the watchful eye of the tried and true economic model of supply and demand. If the supply is down and the demand is up, rates soar.
And that is exactly what happened in May. While Kazan saw rates hit the five-figure level on his longest routes, Dichter never saw anything quite that high but he did see some hauls at $ 9,500 for the lanes he arranges transportation for.
The slow-down in cross-country August business can partly be explained by the many local deals across the country. August is the month of the backyard farmer and the one and two acre guys who sell their goods at farmers’ markets. In the aggregate in a normal year that does lead to fewer cross-country loads.
But Dichter is expecting a September bounce back. “August has been real quiet but I expect it to pick back up in September.”
Even during the lull time in August, he said perishable truck rates hung around the $ 7,000 to $ 7,100 level, which indicates that drivers and fleets operating in the fresh produce space are doing much better than those chronicled in the New York Times article, where less than $ 50,000 per year is the average wage.