US trucking market sees signs of recovery as Valentine’s Day flower shipments arrive

By Abhinav Parmar and Lisa Baertlein

Feb 11 (Reuters) – Florida trucking company owner David Armellini is paying about 20% more this year for each of the roughly 200 extra drivers he is hiring to haul fresh-cut Valentine’s Day flowers to wholesale florists and grocery distribution centers around the country.

That could mean a small increase in the price of a bouquet this weekend if sellers pass along the higher cost. For Armellini, it could be a sign that the longest and deepest U.S. trucking slump is ending.

Shippers across the United States are paying more to truck flowers, fresh produce, and other temperature-sensitive cargo, after deep cold this winter hiked demand for the temperature-controlled trucks called reefers needed to protect them from extreme temperatures.

Job cuts due to trucking company bankruptcies and an increase in immigration checkpoints have also limited the number of drivers, according to some industry experts.

“Where have all the trucks gone? Maybe carriers are waiting for rates to improve when more volume hits the market in March, or as many suspect, they’ve left the industry for good,” said Dean Croke, principal analyst at DAT, a freight analytics firm.

RATES FOR REFRIGERATED TRUCKS JUMP

The January total spot rate to move goods in a refrigerated trailer hit $2.81 per mile on average nationwide, up 10% from a year ago, and the highest since December 2022, when the pandemic trucking boom ended, DAT data showed. Reefer contract rates have been higher than spot rates since April 2022, but hit parity in January, signaling balanced supply and demand.

For routes from Miami, the main port of entry for Valentine’s Day flowers, the off-contract spot rate increase was 40% on average last week, Croke said. About 90% of Valentine’s Day flowers sold in the U.S. move from Ecuador and Colombia to Miami International Airport, typically generating around 4,500 refrigerated truckloads in the two weeks leading up to February 14, he said.

For the better part of three years, there were more truckers than loads for them to carry, depressing rates and erasing profits. Now the trend may be changing, said Armellini, CEO of Armellini Express Lines. 

“We’re starting to see the bigger shippers now wanting to put out full-year bids, which is a sign that they see the market turning. They want to lock in because they know prices are going to go up,” said Armellini, who relies mainly on contracts.

Other trucking executives and analysts warn the reefer market’s strength may be short-lived once the weather returns to normal, and point out the broader trucking industry is still suffering from low demand from domestic manufacturers and homebuilders.

“We really won’t know for a few more weeks whether the spot market distortion was temporary,” said Avery Vise, vice president of trucking at FTR Transportation Intelligence.

BITTER COLD, DRIVER CRACKDOWN

An Arctic blast in recent weeks boosted demand for reefers as shippers of beverages, cosmetics and latex paint used them to shield cargo from freezing, leaving fewer trucks and drivers to haul Valentine’s Day flowers. 

Reefers are often called refrigerated trucks, but can also keep cargo warm when outside temperatures plummet. 

“The driver pool is a little bit more picky or selective this year than last,” said Carlos Oramas, CEO of Florida’s Gems Group, which grows and imports flowers for U.S. grocers Kroger, Wegmans, Publix and Walmart.

Flower shippers plan ahead for special days, contract most of their needs early and have seen marginal – but not disruptive – rate increases, Oramas said.

Cold weather squeezed driver availability at a time when trucking company failures and a federal crackdown on immigrant drivers are thinning their ranks.   

FTR estimates there are 3.5 million active heavy-duty truck drivers in the U.S., down 110,000 since the industry’s peak in early 2023. 

The Trump administration’s immigration crackdown has included truck drivers, with efforts to enforce English-language proficiency and commercial licensing requirements for immigrants. 

Texas, Oklahoma, Wyoming and Florida are among the states with the toughest enforcement.

U.S. Customs and Border Protection told Reuters it had no information to share on the number of drivers detained. CBP falls under the Department of Homeland Security, which also did not disclose that information.

SOME DRIVERS AFRAID TO WORK

Analysts and trade groups said some drivers have been discouraged from working as their colleagues get swept up.

Attorneys are advising drivers with valid work permits to limit travel or stay off the road to avoid detention, said Mannirmal Kaur, senior federal policy manager at the Sikh Coalition, which estimates there are 150,000 Sikh drivers from India in the U.S. 

One independent long-haul operator in California, who is legally authorized to work in the U.S. and asked not to be identified for fear of repercussions, said heightened enforcement has led him to stop trucking outside his home state.   

“We cannot go because we are scared of ICE,” he said, referring to U.S. Immigration and Customs Enforcement, which DHS oversees.

Back in Florida, Armellini said he supports efforts to take unsafe or unqualified drivers off the road and stands to benefit from the regulatory crackdown. His firm, which owns about 150 trucks and has operations around the U.S., has not lost any drivers due to the crackdown. 

“We certainly got a lot of phone calls from shippers in California wanting us to haul loads to Florida, because a lot of their carriers wouldn’t go to Florida anymore,” he said.  

(Reporting by Abhinav Parmar in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Richard Valdmanis and Rod Nickel)