5 Factors that Impact Reefer Freight Rates

Learn how to accurately predict reefer rates, understand why reefer freight rates vary, and learn why it’s important to predict reefer transport costs.

Reefer load rates are generally higher than those of dry vans because temperature-controlled trailers are more expensive to run and maintain. The cost of reefer transport can vary greatly depending on your location, the cargo you need to ship, and many other factors, so it’s important for both carriers and shippers to understand how to predict reefer rates.

National reefer rates

Reefer rates vary by region. Looking at the average across the five regions, national reefer rates currently average $2.39 per mile. 

Reefer load rates are currently highest in the West ($2.53 per mile) and lowest in the Southeast ($2.11 per mile). One reason rates fluctuate by region is the growing season. When more fresh produce is ready to ship from a specific agricultural area, both reefer demand and reefer transport prices will be higher in that region. The same is true for international shipments: When an abundance of produce is coming into the country, shipping rates rise.

Demand is just one of the factors impacting national reefer rates and variances in the average reefer load rate overall. 

5 factors that impact reefer shipping rates

To accurately forecast reefer rates and understand why they vary so greatly by season and location, you need to understand the data that influences those rates. The following factors are key influencers that determine reefer shipping costs. 

1. Delivery distance

No matter what you’re shipping, the distance you ship cargo always impacts the rates you’ll be charged. This is especially true for reefer truck rates. Not only are loads often temperature-sensitive, but they might also be time-sensitive.

The greater the distance goods need to travel and the smaller the time window, the more the carrier must charge. This is where determining refrigerated shipping rates starts.

2. Freight weight and density

Carriers price reefer loads based on two physical traits: the actual weight of the shipment and how much space products occupy in the trailer. 

Weight is simple: The higher the weight, the higher the cost, just as with any other form of shipping. The reason heavier shipments cost more is that the more your refrigerated shipment weighs, the more fuel it takes to truck it from place to place. Carriers must factor this into the cost of moving freight.

But carriers also need to factor in the density of their load, which is how much room freight takes up in a refrigerated trailer. A reefer trailer has a limited amount of space so even if you only have a few very light pallets of produce, the cost will be higher if they take up twice the space of other produce or reefer goods. Think of shipping a pallet of potatoes vs. a pallet of Romaine lettuce. The lettuce will weigh a lot less, but the same weight in lettuce takes up more than twice the space of the potatoes, so the costs could be similar.

When you’re arranging a shipment, keep in mind that weight and density are tied together and both influence reefer freight rates. 

3. Fuel costs

Of course, the price of the fuel itself also has a large impact on how much it costs to ship refrigerated products by truck. 

Diesel fuel costs and their associated taxes vary from state to state and region to region. This means that the “lane” — or area in which you need to ship — will determine the price the carrier pays for fuel. In general, as market fuel prices rise, so do shipping costs. As fuel prices go down, shipping costs follow.

4. Regulations

Local rules and regulations also impact reefer load rates. While all load types are regulated in some way, produce and other perishable goods are often subject to additional state, local, and regional regulations. For example, some items cannot be shipped across state lines without an inspection certificate. Other cargo types must be shipped locally or only in certain areas.

The Food Safety Modernization Act has also had an impact. Monitoring and maintaining refrigeration temperatures for certain freight is vital. As a result, many reefer units are equipped with telematics that enable both carriers and shippers to monitor and control temperatures from a distance.

Also, new emissions and greenhouse gas regulations are continuously changing. Monitoring and controlling the environmental impact of reefer shipping to meet regulations can be both costly and time-consuming. The more regulations that emerge, the greater the impact they have on raising reefer rates.

5. Produce season

One of the biggest drivers for reefer shipping demand (and price) is produce season. When fresh produce ships in volume, particularly from agricultural areas like the Midwest and California’s Central Valley, the demand for refrigerated, time-sensitive shipping goes up accordingly. As a result, so do freight rates. 

This demand shifts to different areas of the country depending on the season, usually with a lull in the winter months. Of course, growing seasons come regularly and can be predicted and planned for with some certainty.

From time to time, other factors will also impact reefer load rates, as illustrated by the demand fluctuations during the COVID-19 pandemic. Often carriers will shift part, if not all, of their capacity to reefer loads during peak seasons, impacting dry-van and other freight rates.

The importance of accurately predicting reefer shipping rates

It’s important for both shippers and carriers to try to predict reefer freight rates. 

Shippers need to be able to predict demand and rates with at least some accuracy to stabilize cash flow and determine accurate shipping costs before products are ready to ship. 

If costs appear to be high, shippers can employ strategies to lower them. One way to do so is by balancing shipments between reefer trucks and dry vans when it’s practical to do so. For example, potatoes or other stable produce can be shipped short distances in dry vans, while other more perishable products like lettuce and spinach are still shipped via reefer truck. 

Forecasting reefer rates can also enable shippers to lower costs by warehousing products and timing reefer truck shipments for when demand and rates are lower. If a product is stable enough, it can be held at a warehouse until rates drop and truck capacity is available.  

Carriers need to be able to predict rates and demand to make smart decisions about purchasing or leasing equipment. Understanding the current demand for a given shipping type, the potential future demand, and the likely profit margin on that shipping method can inform equipment decisions and help carriers earn higher shipping rates.

Predicting rates can be challenging, but data can help. The technology used in machine learning and artificial intelligence allows carriers, shippers, freight managers, and others to predict reefer load rates with better accuracy. This is far from an exact science, though, so there is always some risk that rates will spike for unanticipated reasons. Conditions and supply and demand can change for several reasons, so it’s important to account for all the different influencing factors.

Use a load board to find the best reefer rates

How do you find the best reefer rates? Using a load board ensures you’re getting the most favorable rates in your area for refrigerated shipping. The Reefer Load Board on Truckstop is the perfect place to compare rates, schedules, and shipping speeds to find reefer freight. If you’re looking for the best reefer load rates, request a free Truckstop demo. We’re here to help with all your reefer freight needs.