Refrigerated trucking carriers are closing out a whirlwind year in a strong position, supported by the favorable business conditions of strong demand, tight capacity, imbalanced networks, and high rates that have prevailed since midsummer.
National average reefer spot rates on Truckstop.com’s load boards are at $3.45/mile inclusive of fuel, a year-to-date high and well above any level reached in 2019. The data from the Truckload Carrier Association’s Truckload Profitability Program, a consortium of approximately 175 midsized carriers, also reflects these conditions: Revenue per driver per week for consolidated reefer fleets (company fleet and leased owner-operators) has topped $4,400.
The restaurant industry remains suppressed by high COVID infection rates and lockdown orders in a number of states and localities, pushing consumers into grocery stores. In our view, the nature of the vaccine, which requires stringent temperature controls and will be prioritized for distribution, will also be an important tailwind for reefer demand.
As more Americans are vaccinated, the distorted mix-shift in consumer spending that has tilted toward grocery shopping will begin to normalize, likely in the second quarter of 2021. The risk for refrigerated carriers here is that those carriers who raised driver wages aggressively in order to seat their trucks and expand their fleets may see operating margin compression when spot rates cool.
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