Back to September 2024 Industry Update
September 2024 Industry Update: Reefer
Reefer activity trended in line with van activity, as rates and volumes dipped in August but were higher YoY.
Spot Rates
Key Points
- The national average reefer spot rate excluding fuel declined 1% MoM, or $0.02, in August to $1.97.
- On an annual basis, average reefer spot linehaul rates were up 1.1% YoY and were 3.3% below the LT average.
- The national average reefer contract linehaul rate fell 1.7% MoM in August and was down 4.9% compared to August 2023 levels.
Load-to-Truck Ratio
Key Points
- The reefer LTR in August fell 8.6% MoM and was 8.4% below levels recorded in August 2023.
Market Conditions
Reefer Summary
The reefer sector weakened further in August, with peak produce shipping coming to a close in the South while awaiting peak harvest season in the North to ramp up. However, not all produce lulled in activity, as watermelon transports typically peak around this time of year. The United States ranks as the seventh-largest global producer of watermelon. Florida, Georgia, Texas and California lead the country in watermelon cultivation, with the growing season spanning from April to September and peaking in July and August. During peak season, watermelon production surged by 20%, outpacing crops like potatoes, tomatoes and apples. Indiana plays a crucial role during this period, contributing nearly 30% of the recent truckload volume. Most of the volume is regional, with almost 70% headed to the Chicago/Joliet markets. Reefer spot volumes out of the Evansville market have almost doubled during this peak watermelon harvest time.
The potato harvest is approaching soon as produce continues to shift north. Potatoes remain the top produce commodity shipped in the U.S., particularly peaking during mid-November. Idaho and Washington dominate potato production, accounting for 60% of the nation’s output. Along with potatoes, Washington and the Pacific Northwest are gearing up for fall produce and Christmas tree seasons. Outbound reefer rates from these areas are on the rise and typically peak around Thanksgiving.