Refrigerated Freight: How has freight market volatility impacted reefer contract rates?

Adam RobinsonFreight Market Blog

refrigerated freight

Due to the ramifications of the COVID-19 pandemic over the last year, the freight business has experienced marketplace volatility. The logistics industry has taken a bit of a hit as a result of these unprecedented circumstances. However, as regulations begin to get lifted and things are trending back to normalcy, the industry is starting to regain that lost ground. According to PS Market Research, shippers and freight management parties expect to see a tremendous growth rate of 8.0% in the reefer container market within the next nine years. As one of the fastest-growing markets, some key factors to consider when managing refrigerated freight and how reefer contract rates have been impacted include these core areas of focus.

Why reefer depends on the balance of freight from other modes, as well as dry van and flatbed

The first step in successfully transporting freight is determining the best shipping option based upon the requirements needed. To start, it’s evident that the use of a refrigerated freight truck is required when transporting perishables or goods that need to maintain a specific temperature. However, other modes that don’t require this option can be shipped in different ways. Dry van shipping is one of the most common and trusted options available. With the dry van option, various goods like raw materials or non-perishables that don’t require temperature maintenance can be transported. These trailers also offer the convenience of intermodal shipping, which offers many transportation options (trucks, trains and ships). Another additional option is flatbed shipping. When freight is delivered using this method, docks aren’t necessarily needed, allowing easy unloading of these open flatbeds. This popular mode is often used, and pick-up and delivery times are more available weekly because of the high demand. Regardless, a balance must always exist between all modes and forms of shipping irrespective of size because it tracks back to a truck in at least one part of delivery. 

The importance of shippers’ need to manage refrigerated freight more effectively during warmer months

During warmer times of the year, refrigerated freight needs to be managed as a top priority. This involves a couple of main things. By making certain loading practices are executed correctly, freight management must be working at an optimum level. Checking incoming freight from the source is vital. As refrigerated freight trucks are only designed to maintain and not change shipments’ temperature, when loads are left on the dock too long, they can become warm. This runs the risk of spoilage. That is why it’s essential to focus on proper loading practices. Inconsistencies in temperatures have a considerable effect on the quality of products, ultimately leading to receiving rejections. That’s the outcome nobody wishes for in the bustling world of freight management.

Considering data in reefer freight enables more proactive RFP processes, including mini-bids

Data is one of the most valuable commodities in the transportation market. The new modern standard cuts costs, saves time and unveils potential opportunities that may not have been noticed without it. Utilizing data and a routing guide to measure performance, especially when it pertains to reefer freight carriers and their applicable refrigerated freight, whether LTL or TL as well, can increase bargaining power appreciably. With bargaining power, the renegotiation of contracts can ensue, and if shippers can provide enough evidence through data, more carriers will be willing to compromise on bids that make the most sense. Data is an incredible negotiating resource for a new trade agreement and provides immense value for the trucking RFP processes and mini-bids.

Decrease freight spend by getting the right freight data in your hands

Obtaining the correct freight data is crucial when it comes to optimizing the efficiency of your business. With visible and clear foresight of objective details, making data-driven choices creates more opportunities to cut costs and save time. The correct freight data grants high bargaining power, leading to better deals on RFPs and trade agreements. This offers the best possible solutions to the challenges that the refrigerated freight industry faces in the growing state of the market today. Learn more about how your organization can navigate refrigerated freight market volatility by improving RFP processes via SONAR SCI data and the comprehensive insights within FreightWaves SONAR. Click the buttons below to get started.