


Is The Reefer Supply Chain Starting To Balance Out?
2022 has already proven to be one of the most chaotic years yet for freight procurement and the refrigerated season was set to be the same way. However, while many believe that capacity access will once again be an issue, the reality is that there is currently a confluence of factors that may actually free up capacity in certain sectors. In fact, in the last 3 weeks, the reefer load-to-truck ratio has decreased from 12:1 to 8:1 year-over-year. And based on the USDA forecast the reefer supply chain will see improved balance in 2022, and that will impact rates in the spot market. With that in mind, below are several key forecast updates from the USDA that are likely set to drastically change the way that the reefer market looks in 2022. Citrus Forecast The most recent USDA Citrus April Forecast reduced all Florida grown oranges forecast by 3 million boxes – and comes on the heels of concerning news on bacteria spread among orange growers. At ~38 million boxes, this is a 28% decrease from 2021 and a whopping 43% decrease from 2020. To illustrate the gravity, this would be the lowest citrus production in over 50 years! Pork Forecast The most recent USDA 2022 Pork Production Forecast reduced pork production by 65 million pounds. Exports are now expected to fall somewhere around 6.73 billion pounds, that’s a 4.3% decrease year-over-year. Higher carcass weight and increased disease risk contributed to lower slaughter numbers. Cattle & Beef Outlook In contrast to the negative news coming out of pork and citrus, the most recent USDA Cattle & Beef outlook increased beef production by 195 million pounds to 27.570 billion...
Are Shippers Ready For The Next Pivot? Most Are Not.
As Heraclitus once said, “The only constant in life is change.” That certainly rings true for transportation professionals looking to manage ambiguous freight markets. Truckload pricing continues to change, making it difficult for shippers to understand when they are paying fair market cost to ship goods. Load Volumes Declining Truckload.com reported a 9% decrease in total load postings week-over-week, the largest drop so far this year. Volume is down 29% year-over-year, but about 69% above the five-year average for the week. Load availability was slightly higher on the West Coast, but down in all other regions. Spot Rates Declining Many sectors continue to experience improved balance, which is evident in declining truckload prices. For example, dry van rates are down $0.50+ per mile year-over-year, and refer has fallen $0.90+ from December 2021. And because industrial orders fell, flatbed rates also fell slightly compared to January, but are still up 10% from this same period in 2021. One thing to note is this is the 1st decrease year-over-year since June 2020. Unfortunately, the decrease in flatbed rates will be short-lived as we head into summer, which will bring along disruptions due to US infrastructure initiatives, and road construction. Plus, as the US supply chain continues to clean up port congestion, there will be an influx of new industrial orders. Contract Rate Increasing Weakening spot market rates, along with skyrocketing fuel costs in March, overshadowed record-high prices for loads moving under contract. Contracted rates, on average, for dry van increased $0.19 to $3.28 per mile, eclipsing a previous record high set in February. On average, contracted reefer jumped $0.20 to $3.45 per...