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777 Sourcing Journal

Industrial markets, manufacturing and procurement reporting.

Market brief

Reefer Truckload Rejections Soar: 1 in 5 Loads Rejected Nationally

The freight market is seeing fluctuating volumes and steady tender rejections, with a particular spotlight on the refrigerated sector. Learn why 1 in 5 reefer loads are being rejected nationally, and how rising diesel costs and fall harvests are impacting spot and contract rates. Discover which regions are driving th...

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Refrigerated truckload tender rejections ran at 21.44% nationally as of Oct. 20, according to FreightWaves SONAR data. That rate meant roughly 1 in 5 reefer loads was turned down by carriers. The rejection rate held near 21% after peaking at 22.13% on Sept. 17 and dipping to 20.89% on Sept. 24, the SONAR data showed.

The SONAR Truckload Rejection Index was between 13% and 14% since August and at 13.9% as of Oct. 20, according to SONAR. The SONAR Truckload Volume Index slipped about 2% week over week to approximately 11,000, the data showed.

Julie Van de Kamp attributed the reefer pressure to fall harvest commodities including apples, potatoes and onions moving out of the Pacific Northwest, and to poultry and other protein products shipping from South Dakota, Iowa and nearby states ahead of Thanksgiving demand. “I think that’s primarily being driven by harvest for fall — think apples, potatoes, onions in the PNW, things being harvested and stored there, as well as protein meat products in the Midwest like poultry, early Thanksgiving, getting ready for that and those sorts of refrigerated commodities shipping out of there,” she said. Refrigerated spot rates rose approximately 28% year to date, while reefer contract rates rose about 9% year to date, according to SONAR data Van de Kamp cited. She noted diesel costs made the economics of refrigerated freight especially sensitive because reefer units must keep trailers running continuously, including when empty or parked.

Van de Kamp also cited winter as a factor that could sustain or push rates higher, because reefer equipment protects temperature-sensitive freight from freezing when ambient temperatures drop below 32 degrees, with demand extending into the first quarter. “I expect to see refrigerated rates continue to rise even more than van rates,” she said. Van de Kamp said Southern California tender rejections remained below the national average but had been tightening, a pattern she said typically precedes peak-season freight activity. The reefer rejection rate sat above the overall truckload rejection index, making temperature-controlled capacity a separate consideration for sourcing professionals.

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