Short-haul reefer loads led the unprecedented monthlong rally in contracted truckload volumes that peaked on March 23 and has since evaporated. At one point, reefer volumes were up approximately 85% year-over-year (y/y); now they’re still outperforming 2019 by 21%, even as dry van volumes have gone negative.
In our view, the next month will see fierce competition for defensible freight commodities like consumer staples including consumer packaged goods and food and beverage. Capacity redeployed from restaurant customers and private fleets will bid down contracted reefer freight, and rates should fall further.
Service levels and customer relationships will be paramount for maintaining volumes for both asset-based and non-asset transportation providers. Beginning about two weeks ago, we heard anecdotes from both large truckload carriers and 3PLs who were reapproaching customers with aggressively lower bids for contract freight in an attempt to secure volume ahead of anticipated competition.
Produce harvests and temperature-related increases in demand for beverages, beginning in the Sun Belt, will cause local and temporary spikes in volatility, but the widespread availability of reefer capacity will likely mute the effects.
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