Back to December 2024 Industry Update
December 2024 Industry Update: Reefer
Average reefer rates made considerable gains in November despite a slight decline in overall demand.
Spot Rates
Key Points
- The national average reefer spot rate, excluding fuel, increased by $0.07 MoM, or 3.7%, in November to just under $2.04.
- On an annual basis, average reefer spot linehaul rates were up 4.8% YoY in November but remained below the LT average by 2.7%.
- The initially reported national average reefer contract linehaul rate rose slightly in November by 0.1% MoM but was 3.2% below November 2023 levels.
Load-to-Truck Ratio
Key Points
- The reefer LTR declined slightly in November by 0.5% but remains elevated compared to November 2023 by 12.8%.
- Compared to the 5-year average, the reefer LTR was 2.7% lower in November.
Market Conditions
Reefer Summary
Reefer demand showed variability in November. While overall domestic produce volumes declined, demand for reefer capacity near major ports increased due to higher imported produce volume. Rates for reefer freight remained stable nationally but experienced slight increases near ports to account for the increased produce imports and holiday shipments. Citrus and avocados played a significant role in driving reefer demand, particularly on the West Coast and Gulf regions.
One domestic product that drove reefer demand is cranberries. Massachusetts and Wisconsin contribute 80-90% of U.S. cranberry production. Truckload shipments went to populous states like California, New York and Florida, and since cranberries are a holiday season staple, reefer demand was driven up for timely delivery during the holiday season. At the other end of the spectrum, Florida’s produce industry suffered severe damages estimated between $1.5 and $2.5 billion due to Hurricane Milton. Strawberries, melons, and tropical fruits were the hardest hit, causing reefer volume to decline by 80% compared to last year.
Peak shipping volumes, normally 5,000 truckloads per week, are down to 1,000. Recovery is anticipated by May 2025, though risks persist.
Reefer freight typically sees demand spikes in the fourth quarter due to holiday and produce seasons. This aligns with historical trends where capacity tightens in port regions and agricultural hubs during winter. Holiday demand contributes in some regions, as shippers work to protect temperature-sensitive goods during transit.