Fresh haul

| December 12, 2008

Produce is the preferred cargo for many owner-operators, despite fluctuating rates, long waits and seasonal variation.

Rodger Munson has hauled produce for most of his 40 years of driving, 30 years as an owner-operator, but he’s never seen it this bad. The Gaylord, Mich., driver and owner of West Nor West Diversified says the only way he’s staying afloat is by owning his tractor and trailer and by digging into his savings. He’s also selling land in Maine that’s been in his family for 50 years.

“I run up and down the highway because there’s nothing better,” he says with pride in his 2005 Peterbilt, which he bought for $160,000, and his 53-foot Great Dane reefer, which was $80,000. “But now it’s digging into my livelihood so bad I wish I’d never fallen in love with the industry.”

DuWayne Marshall has a slightly different story to tell. The Watertown, Wis., owner-operator has confined produce almost exclusively to backhauls since 1990. Now, after delivering to California, he transports fruits and vegetables back to the Milwaukee area on a contract for Brennan’s Market, a group of four upscale grocery stores. “They are generous enough to pay a fuel surcharge,” Marshall says.

These days, the color of produce is anything but green for many owner-operators. Rates often fall short of keeping pace with fuel costs. Steady loads may disappear because of crop freezes in Florida or salmonella scares over tomatoes or chilies. The carrier is rarely compensated for wait times, which can stretch to many hours. Loads occasionally are rejected at the destination, often through no fault of the driver.

“Produce transportation is very volatile from a demand standpoint,” says Mark Petersen, general manager for C.H. Robinson Worldwide. “Rates reflect the demand for a given day in different markets, and carriers tend to reposition themselves to take advantage of that.”

Martin Gyuro, owner of produce broker Charter Marketing in Tucson, Ariz., says it’s often difficult to find enough trucks to carry loads from Arizona, California and Texas to Toronto and Detroit. In some cases, he says, rates have almost doubled from spring 2007.

If you want to haul produce independently, you’ll have to pull your own trailer, which can cost $70,000 or more new. You’ll also have to provide fuel for refrigeration when the trailer’s loaded.

You’ll be lucky to find a shipper who will work with you directly if you have only one or a few rigs, veteran produce haulers say. That means you’ll have to rely on brokers to find freight for you. Brokers sometimes negotiate fuel surcharges, but you can’t be sure you’re getting a cut of the extra fees. And the number and frequency of loads can fluctuate depending on the season and the shipping lane, so you may have to scramble to find freight when your regular lane goes out of season.

Operators using refrigerated equipment aren’t making a killing. Owner-operators with reefers are projected to make less than $50,000 this year, according to figures from Commercial Motor Vehicle Consulting. That’s down from an average of about $57,000 in 2006. Figures aren’t broken out for produce haulers among reefer operators.

Payment methods vary: flat rates, per mile, by weight. Bob Matson, an owner-operator in Friendship, Wis., who hauls cheese and chocolate to the West and produce on his backhauls, gets a flat rate. He estimates that rates have increased about $1,200 per haul in the past three years. A recent load from California to the Milwaukee area paid $6,000 for 2,200 miles, but fuel siphoned off about half of that. “I’m just breaking even,” he says. “There’s no profit.”

Rates typically shrink in the winter when Matson runs his 2005 Peterbilt and 2007 trailer out of Yuma, Ariz., and he collects $3,200 to $3,500 for 1,800-mile northbound loads.

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