Posts Tagged “refrigerated loads”
DAT Freight & Analytics reports truckload freight volumes declined and national average spot rates for refrigerated loads fell for the fourth consecutive month in April.
The DAT Truckload Volume Index, a measure of loads moved during a given month, was lower for all three equipment types:
- Van TVI was 206, down 15.5% from March and 12.3% lower year over year.
- Reefer TVI fell to 154, a 16.3% decline from March and 12.5% lower year over year.
- Flatbed TVI was 239, 13.7% lower compared to March but 3.5% higher year over year.
It’s not unusual for truckload freight volumes to decline from March to April, according to the DAT report.
The van and reefer TVI numbers were the lowest since February 2021, when a polar vortex and unprecedented winter storms disrupted logistics activity across large areas of the U.S. and Canada.
“May will be pivotal for shippers, brokers and carriers,” Ken Adamo, DAT’s chief of analytics, said in the release. “After a challenging first four months of the year, we expect to see the effects of seasonality on freight volumes and rates. The question is how sustainable those effects will be.”
National average load-to-truck ratios decreased, indicating weaker demand for truckload capacity on the spot market.
The last time van and reefer ratios were this low was in May and April 2020, respectively, during the supply chain shocks of the pandemic:
- The van ratio was 1.9, down from 2.0 in March, and 3.4 in April 2022.
- The reefer ratio was 2.7, down from 3.0 in March and 6.3 year over year.
- The flatbed ratio was 12.1, down from 12.1 in March and 64.5 year over year.
Lower demand for truckload services led to a drop in national average spot van and reefer rates, the report said:
- The spot van rate averaged $2.06 per mile, down 10 cents compared to March and 71 cents lower year over year.
- The spot reefer rate fell 9 cents to $2.41 a mile, 72 cents lower than in April 2022.
- The spot flatbed rate dipped 4 cents to $2.67 a mile, down 70 cents year over year.
Fuel surcharge amounts fell 2 cents to an average of 47 cents a mile for van freight, 52 cents for reefers and 57 cents for flatbeds, the report said. At $4.10 a gallon, the price of diesel was 11 cents lower compared to March.
DAT said the national average rates for contracted freight were lower compared to March, but the spread between contract and spot rates rose to near all-time highs: 62 cents for van freight, 60 cents reefers and 66 cents for flatbeds.
Adamo called the spread between spot and contract rates “an indicator of where we’re at in the freight cycle — the balance of bargaining power among shippers, brokers and carriers.” For the gap to close, two things need to happen.
“One, the supply of trucks on the spot market needs to diminish, which unfortunately means more carriers exiting the market,” he said. “Two, there needs to be higher demand for trucks — in other words, shippers with more loads than they planned for.”
In 2016 and 2019, it was the third week in May when the spot market entered a recovery phase after prolonged declines and stagnation, Adamo said in the release.
“Seasonality kicked in and shippers needed more trucks to move fresh produce, construction materials, imports and summer and back-to-school retail goods,” Adamo said. “If we see an uptick in demand before Memorial Day, it will be a welcome sign for owner-operators and small carriers as we head into the summer and fall.”
By Jennifer Brearley Transportation Broker, ALC Richmond
In Tuesday’s article, we discussed some of the most important things to consider when selecting a carrier for sensitive, refrigerated loads. In addition to carrier vetting, it is also crucial to ensure that hot product is not being loaded into the trailer and equipment failure or human error are avoided. Below are some tips that could help you steer clear of these issues leading to rejected loads and claims.
Prevent hot loads before they get on the truck.
- Refer trailers are not designed to set product temperature. They are designed to maintain it.
- Freshly picked loads that sit on the dock in extreme heat waiting to be loaded may be out of temperature tolerance at loading. According to the article, The Keys to Preventing Rejected Loads in Refrigerated Transportation, “as much as 32% of all cargo is loaded at the wrong temperature. Poor loading practices like these can result in loads spoiling in transit if the temperature is incorrect. No matter how chilled the reefer is, the temperature is going to rise – this causes condensation, which results in spoilage.”
- Ensure the driver understands proper pulping practices. Prior to loading, and during unloading drivers should pulp and record temperatures of at least every other pallet of the product loaded on to their trailer.
- Drivers should be instructed not to accept the warm products at the shipper. Once they sign for it, they are responsible for it.
- Document all communication with the driver and the shipper regarding temperature discrepancies prior to loading.
- In transit pulping when possible is preferred as well. Newer refrigerated trailers have advanced temperature monitoring that will notify the driver and dispatch if something is wrong which is helpful in today’s world where most loads are sealed.
Avoid equipment failure and human error.
- Proper routine maintenance is a must. Loading an unknown carrier with a sensitive product is a huge risk. The vast majority of loads hauled pick up and deliver without incident. A temperature claim resulting from poorly maintained equipment will result in unrecoverable costs and damaged relationships. Ask drivers you are unfamiliar with about their maintenance routines. You will be able to tell pretty quickly how diligent they are about it. There are up to 200 possible alarm codes in newer reefer units. That can be 200 potential problems. Add to that a damaged chute, leaking trailer, or damaged seal and the risk of loss multiplies.
- Incorrect unit settings can happen for a number of reasons. Human errors can result in a ruined load. -20°F instead of 20°F are vastly different and such errors result in a disaster for the cargo inside the trailer. Regular communication from pick up through delivery is crucial. It is easy to assume that the temperature today is the same as it was yesterday. This is a dangerous assumption.
Educate yourself on the products your customer ships, the methods the shipper utilizes for loading trucks, and the general function of refrigerated trailers. This is the most important part of the vetting process. In order to effectively communicate with the carrier, you have to know what you are talking about.
Rejected loads are undoubtedly something we want to avoid. While these vetting processes may not prevent every rejected load, they can certainly help to lower if not eliminate the avoidable ones. (Part I was published on July 28th.)
Jennifer Brearley began working for the Allen Lund Company in February of 2019 as a transportation broker. She joined the company with five years of domestic and international shipping experience. Brearley attended Western Governors University and received a BA in Interdisciplinary Studies.