Estimating the Impact of Seasonal Truck Shortages To the Pacific Northwest Apple Industry: Transportation Cost Minimization Approach

This research paper focuses specifically on the frequent and persistent problem of truck shortages which occur for shipment of time-sensitive, perishable produce out of the Pacific Northwest. Washington State is the number one apple producing state in the U.S., producing over 2.7 million tons of apples per year valued at over $1 billion. However, without timely and accessible transportation to move the product from production to the table of the consumer, the value to apple producers and the states’ economy diminishes rapidly. This research aims to identify and quantify the change in total transportation cost which occur as a result of seasonal truck shortages and associated rate increases and to provide an avenue for evaluating changes at specific destination markets, modal changes and market competitiveness. This is accomplished by utilizing a cost-minimizing optimization model representing apple shipments from 29 producing supply points to 16 domestic markets and 3 international export markets over four seasons and two mode options (truck and rail). Total transportation costs increase nearly $12 million as a result of truck shortages, going from $245.6 million without shortages to $257.5 million under the current seasonal situation. Overall (across all seasons), the export markets of the Nogales, McAllen and the Port of Seattle experience the greatest negative impact as a result of truck shortages, followed by domestic markets within close proximity of Washington at Seattle and San Francisco. The Large markets of New York and Los Angeles also experience relatively large increases in transportation cost per tonmile.