Check Call: Cupid can’t take all the credit

Return of the presents | RIP avocado toast

Mary O'Connell

3 years ago

people gathered around a desk of computers. Check Call news and analysis for 3pls and brokers

Hot Take

It’s not truly mid-February without celebrating Valentine’s Day, the day of chocolate and flowers. While Mother’s Day holds the title for the highest flower-buying holiday, Valentine’s Day this year was almost met with flower shortages.

Americans will spend roughly $13.19 billion on Valentine’s Day. The most commonly purchased items are flowers, chocolates, high-end perfumes, watches, jewelry and electronic gadgets.

Let’s dive into those flowers.

As we all know freshly cut flowers are extremely perishable. Flowers have to be delivered within a three-day window after they’re cut. From there they are thrown into arrangements and florists’ refrigerators. The largest supplier of flowers to the U.S. is Colombia.

A majority of the flowers are brought into the U.S. through Miami International Airport, taking only 24 hours from the time flowers leave the farm in Latin America till clearing customs in Miami. UPS relies heavily on its 27,000-square-foot warehouse at the Miami airport to hold these flowers till they can be dispersed nationwide.

As these beautiful flowers travel throughout the country, they need to be stored at a chilly 34 degrees Fahrenheit, salvaging their shelf life for as long as possible. Most florists start placing their Valentine’s Day orders around Christmastime.

Many florists have said the hardest part this year wasn’t the flowers, it was everything else: the vases, tape and everything needed to make the actual arrangements. Multiple suppliers had shortages or were unable to provide the items in time, making it challenging for many small businesses that were experiencing higher demand than previous years.

Love may be in the air, but not as much on the floral supply chain side. The planning and precision it takes to make sure everything gets where it needs to be before spoiling is truly a work of art.

Quick Hit

Like any good holiday party, that next-day (in this case month) hangover is not to be trifled with. Retailers across the country are still feeling the impacts of returns from the holiday season. We had record sales at the end of 2021. Everyone was saying shop early, shop often; if you see it buy it. Turns out everyone did and all the extra things they got “just in case” something didn’t show up has to go back to the store.

Americans are expected to return about $158 billion worth of goods purchased in the last two months of last year, roughly a 56% increase from 2020. Not only are return numbers climbing, but all those returns have to get somewhere to be returned. The cost of each return, given the current supply chain challenges and inflated spot rates, means retailers are looking at billions of dollars in added expense.

If you have a retail-heavy customer, get a plan in place. If it’s gonna be a billion dollars to get returns processed, try to get them as close to $999 million as possible.

The U.S. has temporarily suspended imports of avocados from Mexico after a U.S. Department of Agriculture inspector received a threatening phone call. Michoacán is one of only two places at the U.S.- Mexican border where avocado inspections can occur; the other is Jalisco. The USDA’s Animal and Plant Health Inspection Service is investigating the threat to ensure the safety of all personnel in Michoacán.

While millennials are still seeing a rise in the price of their avocado toast, the Association of Avocado Exporting Producers and Packers of Mexico has urged a swift resolution to the investigation as the avocado export industry provides more than 300,000 hangs in the balance.

As we start to get into planting season here in the U.S., shippers dealing with the USDA have to have all their t’s crossed and i’s dotted as the USDA can be a fickle beast when it comes to what can and cannot be put in the ground, or enter the country.

TRAC Thursday

SONAR TRAC Market Dashboard Little Rock to Chicago

It’s the best part of Thursday: TRAC time. This week we’re looking at Little Rock, Arkansas, to Chicago. Capacity is tightening in Little Rock, meaning spot rates are increasing, as we see from the TRAC rate per mile. Currently the rate per mile is at $3.38 and heading upward. It was a nice change of pace from the almost $4 per mile we saw mid-January. With rates trending upward, start booking those loads now and give some extra lead time to carriers to avoid inflated spot market rates.

How’d the lemonade stand do?

Earnings season hasn’t left us yet. Ryder System closed out 2021 with more than a 700% increase from last year, with $181.8 million in the fourth quarter over the $25.8 million from 2020. The main reason for Ryder’s substantial growth is its core segment, fleet management solutions. Operating earnings rose more than 400% on a quarterly basis to $254.8 million. Fleet management solutions include leasing of vehicles, maintenance and sale of the precious used vehicles. The goal of implementing new pricing with existing customers should continue to make the 2022 revenues something for the books.

Universal Logistics Holdings didn’t have a banner 2021. Port and supply chain congestion, combined with the tough labor market, made for some less than desirable effects on the budget. That said, the company reported a record year of revenue in 2021, up 26% year-over-year to $1.75 billion, with net income climbing to $74 million. Fourth-quarter earnings per share came in at 60 cents. Universal is a major cross border provider and given the disruptions happening at the U.S.-Canada border, management of Universal is looking at this blip on the radar but doesn’t expect it to affect overall profitability.