The produce industry is facing more supply chain challenges than ever before. But, with any challenges, there are usually opportunities and solutions. This is true for the produce industry. Perhaps the biggest supply chain challenge is the availability of trucks and drivers. Peak produce seasons exacerbate the trucking shortage. Produce is perishable and many of the trucks transporting the produce must be equipped with reefers (refrigerated units) for the transportation of temperature sensitive cargo. During peak seasons, truckers with reefers are in short supply.
The pandemic has further tightened the supply as the produce industry has also had to compete for trucks with the medical and pharmaceutical industries which also need refrigerated vehicles to transport COVID-19 vaccines.
But, it is not only trucks that are in short supply, there is also a scarcity of drivers. The Federal Motor Carrier Safety Administration (FMCSA) requires that drivers be 21 years of age or older to operate a commercial motor vehicle in interstate commerce. The rules are more lenient for intrastate commerce in most states with 18 year olds able to drive commercial vehicles. Aware of the driver shortage, the FMCSA has launched a pilot program to study the feasibility, benefits, and safety impacts of allowing a driver under the age of 21 to operate a commercial motor vehicle in interstate commerce.
The shortage of trucks and drivers, the further tightening of reefer capacity, and the unprecedented demand for reefers for vaccine distribution have all dramatically driven up trucking costs. In some instances, such costs have resulted in the cost of trucking exceeding that of the commodity being trucked.
The FMCSA's Hours of Service (HOS) regulation has also tightened the supply of available trucking. The HOS law states that a trucker can drive for 11 hours in a 14-hour consecutive window. After this point, a ten hour rest is required. The produce industry recently caught a break, however, with the recent 150 Air-Mile Hours of Service Agricultural Exemption. This exemption pertains specifically to the trucking of raw agricultural commodities. According to the FMCSA’s Office of Compliance and Enforcement Director Joe DeLorenzo, “Any of the time that takes place working within that 150-[air]-mile radius is not counted toward the driver’s hours of service … that includes empty miles driven to a pick-up point, it includes loading time, and it includes the time driving with an agricultural commodity within a 150-[air]-mile radius of the source.” Return trips to the source are also covered under the exemption.
This exemption provides some much needed flexibility for the already constrained produce industry. One way shippers and receivers can benefit from the exemption is to consolidate smaller loads from multiple growers in the same grower area. Provided all of the growers are in the 150 mile radius, the time spent going to the different growers would not be counted as part of the maximum driving hour window. Using a local warehouse can also help combat the driving hour limitations. Consolidation and local warehousing is often critical when receivers are faced with uncertain demand in the new COVID-19 world.
In this new environment, tracking, tracing and real-time data are also more critical than ever and allow receivers and shippers to better plan for the flow of produce coming in. Temperature data loggers can help shippers and receivers take quick action when temperature excursions occur and better ensure that the cargo arrives as fresh as possible.
In all areas of the supply chain for the new COVID-19 world, the costs of providing sanitization and personal protection equipment (PPE) such as masks in order to create a safe and comfortable working environment have increased labor costs and have provided additional challenges to the produce industry. There have been further disruptions throughout the industry due to working illness and social distancing requirements. These additional challenges make it increasingly likely that companies will look to invest in increased automation and robotics in order to be more resilient in times of crisis. Indeed, robotics is already used in food processing activities involving uniform tasks, such as packaging and quality control. In a recent Gartner survey, 87% of supply chain professionals said that their companies are planning to invest in resilience in order to better adapt during abnormal times.
Among the outcomes of the COVID-19 pandemic are a shift to more working from home and an increased reliance on digitization and electronic verification. The pandemic has accelerated the adoption of these technologies and should result in their increased use in the food supply chain. The produce industry is likely to benefit from technologies such quality verification with blockchain technology and increased digitization for export certification, logistics and food delivery. These technologies are very likely here to stay as a more integral part of the supply chain.
Investments in technologies such as automation for food processing tasks should help those in the produce industry to lower costs and better manage a potential labor vulnerability in times of crisis. It also seems very likely that growers and receivers will also be watching very closely the future development of autonomous trucks and other vehicles.
Barron’s: “How to Prepare Supply Chains for the Next Global Shock”
FMCSA/Registration/Commercial Drivers License/CDL Under 21 Pilot
FMCSA Regulations/Hours of Service
FMCSA Regulations/Hours of Service/ELD Hours of Service (HOS) and Agriculture Exemptions
Food supply chain resilience and the COVID‐19 pandemic: What have we learned?
NAPTWG: Produce Transportation Best Practices
Next Exit Logistics: New Guidance on the 150 Air-Mile Hours of Service Agricultural Exemption
Trucker Nation, “What is the ELD Mandate for Truckers”