The reefer market is following the dry van market, broadly speaking, and setting new highs in tendered loads, tender rejections and spot rates. The average reefer spot rate on Truckstop.com’s load boards rose to $3.33/mile last week, the highest rate in several years.Reefer capacity is tighter now than it was at the height of the initial COVID-19 grocery-hoarding period in late March. Reefer tenders are being rejected by carriers and 3PLs at a rate of 38%, a very high level that indicates a persistent and fundamental lack of capacity relative to demand. On May 21 we said that reefer carriers were set up for a strong year despite poor macroeconomic conditions; the ensuing months have borne out that thesis. Operating ratios were initially challenged by lower contract rates and network imbalances that pushed empty miles higher, but reefer carriers regained pricing power and improved revenue per tractor per week as the summer wore on.Demand remains very high and several regulatory and structural issues are preventing enterprise carriers from efficiently seating their trucks or adding capacity to their fleets. For those reasons, we expect reefer carriers to continue executing in a favorable business environment and close out 2020 with a strong Q3 and Q4 performance.
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