Back to January 2025 Industry Update
January 2025 Industry Update: Reefer
Inclement weather and seasonal demand pushed reefer rates higher in December.
Spot Rates
Key Points
- The national average reefer spot rate, excluding fuel, increased by roughly $0.04 MoM, or 1.7%, in December to $2.07.
- On an annual basis, the national average reefer spot linehaul rate was up 4.9% YoY but remained 1.1% below the LT average.The initially reported national
- average reefer contract rate, exclusive of surcharges, increased 0.6% MoM in December but was down 2.2% compared to December 2023.
Load-to-Truck Ratio
Key Points
- Similar to the dry van market, the reefer LTR spiked in December, rising 50.5% MoM from 5.82 in November to 8.76,
- Compared to the same month in 2023, the reefer LTR was 74.9% higher YoY and was 6.3% higher than the 5-year average.
Market Conditions
Reefer Summary
December of course brings out Christmas, and Oregon is the largest producer in the United States harvesting between 4.5 and 5 million trees annually. According to the Pacific Northwest Christmas Tree Association (PNCTA), 92% of all trees are exported out of the region. California receives 45%, followed by Mexico at 16%. The remaining trees are dispersed throughout the U.S., Japan and the Philippines. This equates to approximately 7,000 reefer truckloads each season.
While Idaho is often considered the French Fry capital of the world, specifically around the Twin Falls and Blackfoot areas, Othello, WA, in the Pendleton, WA market, is the true French Fry capital due to its three major potato processing plants run by J.R. Simplot Co and McCain's. Together, they produce 1.5 billion pounds of frozen French fries, tater tots and hash browns every year, the equivalent of nearly 35,000 refrigerated truckloads annually.
According to Dale Lathim, Executive Director of the Potato Growers of Washington, “French fries are big business. About 40 billion pounds of frozen potato products are produced worldwide each year, and of that, North America produces about 16 billion pounds and the Columbia Basin produces 6 billion pounds. Othello, with a population of 8,700, produces 15% of the French fries in North America.”