Back to October 2024 Industry Update
October 2024 Industry Update: Reefer
Reefer activity declined considerably in September while average spot rates registered only minor declines.
Spot Rates
Key Points
- The national average reefer spot rate excluding fuel was virtually flat in September, dropping 0.3% MoM, or below $0.01, to $1.96.
- On an annual basis, average reefer spot linehaul rates were up 2.2% YoY but sit 5.0% below the LT average.
- The initially reported national average reefer contract linehaul rate rose 0.7% MoM but was down 4.1% compared to September 2023.
Load-to-Truck Ratio
Key Points
- The reefer LTR in September fell 15.8% MoM and was 2.0% below the same month last year.
- Compared to the 5-year average, the reefer LTR is down 35.9%.
Market Conditions
Reefer Summary
The reefer segment faced notable challenges and opportunities in September 2024, driven by shifts in demand, rates and technological innovation. Spot rates saw a mixed performance across different regions. For example, Florida experienced a month-over-month rate increase of $0.19 to $2.27 per mile, while California saw the sharpest decline of $0.40 per mile to $2.92. On average, all-in reefer spot rates were down 5.6% YoY, reflecting broader market weakness, especially in regions tied to produce and food shipments. Experts predict that the holiday season and increased produce shipping will likely create upward pressure on rates as the year closes.
Technological advancements are reshaping the reefer segment, with innovations in cold chain management and autonomous trucking playing a crucial role. Large fleets like Stevens Transport and Prime Inc. are increasingly focusing on fuel efficiency and precise temperature controls to meet the demands of high-value perishable goods, particularly in the food and pharmaceutical sectors. The healthcare industry's growing reliance on temperature-controlled shipping for pharmaceuticals has also contributed to the sustained demand for reefer capacity, with drugs requiring precise conditions during transit.
Looking forward, analysts expect a gradual recovery in reefer demand, especially as the produce season and holiday shipping peaks. However, capacity remains high in certain lanes, which could keep rate increases modest. Brokers, carriers and shippers should pay close attention to freight volumes and regional rate shifts to navigate the remaining months of 2024 successfully.