Shipping: Road rage

There was a collective groan in the room when we started discussing shipping. The majority of attendees use common carriers, while a small percentage had their own fleet of trucks.

But most agreed that shipping creates some of the most frustrating challenges when it comes to nursery production.

“Shipping and transportation is the weakest link in the nursery industry,” says Fount May Jr., part of the second generation at May Nursery in Havana, Fla.

“Driver shortages have caused late deliveries and really created a backlog at the nursery.”

Jim Berry, founder of J. Berry Nurseries in Grand Saline, Texas, voiced the same frustrations. He’s shipping product to big-box stores and independent garden centers in more than a dozen states.

Part of the horticulture industry’s success is dependent on the trucking industry – a group that needs up to tens of thousands of new drivers to supply the needs of North American commerce, Berry says.

As of April 1 of this year, the American Trucking Associations estimated the driver shortage to be between 35,000 to 40,000.

“Due to growing freight volumes, regulatory pressures and normal attrition, we expect the problem to get worse in the near term as the industry works to find solutions to the shortage,” reports ATA Chief Economist Bob Costello.

Costello says turnover at truckload fleets – a barometer of the driver shortage – remained very high in the fourth quarter of 2014.

Turnover at large truckload fleets fell one percentage point to an annualized rate of 96 percent in the fourth quarter, while turnover at smaller truckload carriers – those with less than $30 million in annual revenue – rose one percentage point to a rate of 95 percent in the fourth quarter.

The turnover rate at less-than-truckload fleets was 10 percent in the fourth quarter, down from 13 percent in the previous quarter.

When there’s a driver shortage, it’s difficult to add capacity, Costello says in a video message posted on the ATA YouTube page. Driver shortages increase operational hardships and increase costs, and cause freight delays, he adds. (Something the growers at our event know too well.)

The market is reacting to the driver shortage by increasing pay – by as much as 15 percent in some cases last year, a number that Costello expects to reach this year as well.

Chris Uhland, CEO of Harmony Hill Nursery in Downingtown, Pa., said the driver shortage was definitely a problem for his operation last year. And checking in with him this spring, the shortage hasn’t affected him yet. But he agrees with May that shipping is indeed the weakest link in the industry.

“Pricing is across the board,” Uhland explains. “I try to get pricing from a couple of different companies, and those prices can vary as much as $400 for the same shipment.”

Uhland uses three carriers, and each one fits into different needs and circumstances. For example, one may do most of his local deliveries, while he relies on two companies for shipments to the north. And one he uses specifically for high-end clients for deliveries to places like Martha’s Vineyard or Nantucket.

“You have to know your customer and your carriers, and pair them up for the best customer service experience,” he adds.

Lloyd Traven at Peace Tree Farm works with a large greenhouse operation a couple hours north of his location to ship product. This large greenhouse typically runs three trucks a week out of New England, a region where Peace Tree does a lot of business. Traven sends the greenhouse a list of delivery locations and the greenhouse responds with a yes or a no. The partnering greenhouse drives to Peace Tree and makes the deliveries. Traven is paying his share of the freight without the hassles of having to source a truck.

Another grower, who got tired of relying on common carriers, tries to budget a truck purchase every couple of years, a practice he started more than 10 years ago.

The Perennial Farm in Glen Arm, Md., is fortunate enough to have its own fleet of trucks. But the nursery, which ships product to IGCs, landscape contractors and rewholesalers in the Northeast and Mid Atlantic, sometimes outsources shipping to a third party in the height of the spring rush, says Tom Watson, product brands manager at The Perennial Farm.

It’s not all about trucks. May also referenced the change in ways product is shipped.

“We used to floor-stack everything, but now we have to use racks for most of our material, although we still do a little floor stacking,” May says.

Shipping on racks creates its own set of problems.

“We have trouble getting back our racks. We usually experience about an 8 percent attrition on racks, but it shot up to 15 percent in 2014.”