By: Corrie White, market reporter at FreightWaves
While the logistics industry has traditionally leaned on seasonality to understand fluctuations in the market, that strategy doesn’t seem to be working anymore.
“If we have learned anything over the past year, it is the fact we cannot apply pre-pandemic patterns to the current freight environment just yet,” said Zach Strickland, director of Freight Market Intelligence at FreightWaves.
This also applies to reefer carriers — a sector that is more sensitive to seasonality and market fluctuations than dry van, given the lower amount of equipment. While today fewer than 500,000 reefer trailers are on the road, 70,000 new trailers are sold each year. By 2025, the refrigerated trucking market is estimated to reach $15 billion, up from $10.5 billion in 2018. While capacity supply actively works to keep up with consumer demand, shippers continue to feel the pain of high rates.
Reefer spot rates, examined year-over-year, are much higher for shippers today than in Q1 of last year. Strickland added: “Even though the Reefer Outbound Tender Rejection Index was higher with a rate around 41% on Jan. 14, 2021, there have been significant rate increases over the past year, with spot rates increasing 28% over the same period last year.”
Private reefer fleets and asset-based carriers must therefore optimize the capacity they have and minimize waste wherever possible. According to data from insurance provider TT Club, 29% of reefer claims in 2019 came from communication errors, while 24% of claims were related to temperature setting errors.
Errors like these can lead to significant cargo spoilage and loss, which is a detriment to an operation’s bottom line. Prior to selecting PowerFleet’s cold chain solution, a fleet hauling frozen seafood lost their entire load due to spoilage — a load valued at $250,000.
“These claims can be minimized by two-way communication, device monitoring and alerts when conditions fall outside expected parameters,” said Matt Harris, Vice President of Account Management at PowerFleet.
PowerFleet’s cold chain solution provides real-time asset visibility, including key operational data such as asset location, fuel-levels, fault codes, and temperature set points for trailer refrigeration units. The suite of telematics devices that power this critical data are 4G LTE and now offer optional satellite fall-back, to ensure constant temperature monitoring and communication — especially for food safety and pharmaceutical integrity concerns. All of the data is managed from a single platform where users can set preemptive alerts for at-risk cargo.
For fleets that haul food and beverage products, being able to utilize a trailer for various temperature needs helps create optimized capacity of shipments. Depending on the commodity, fleets can utilize temperature monitoring sensors to set appropriate ranges and receive real-time readings on various designated zones of the trailer such as frozen, fresh or dry-products.
“Instead of having to endure the long waits for new trailer builds, fleets with older model reefer trailers need a solution for monitoring cargo to ensure food safety compliance until they update their fleet. Being able to track cargo temperatures and deliver critical information is key,” said Harris. “Having a cold chain solution like ours helps customers create significant cost savings by avoiding spoilage claims, as well as extending the life of existing equipment.”
This solution will even alleviate driver stress, since any system notifications can first go to the fleet manager, who will then decide if notifying the driver for intervention is necessary.
To learn more about PowerFleet’s solutions, click here.