The year 2023 was a tough one for shippers and logistics professionals involved in reefer logistics. Freight prices have been consistently low while fuel prices have skyrocketed. There is hope: experts expect both rates and freight volumes to increase in mid-2024.
In this article, we’ll review the conditions of the freight market in 2023, and the outlook for 2024. We’ll also look at innovations and changes in reefer transportation that can help shippers become more agile, more efficient, and more sustainable in 2024 and beyond.
The Recovery of the Freight Market
The low rates seen in 2023 were mainly the cause of overcapacity. Stemming from a freight demand boom in 2021 and 2022 as consumers rushed back to buying as the COVID-19 pandemic eased, this oversupply and reduced demand is hitting transportation companies hard. Inflation plays a role in conservative spending since the Federal Reserve has continued increasing interest rates in an attempt to leash inflation, which is now at a 40-year high.
The market is expected to remain soft during the early winter months of 2024, with a 1 to 1.5% growth in market value over the year.
Don’t despair: truckload demand actually grew for most of 2023. That effect has been hard to see because the oversupply still remains so large compared to demand, but experts expect that demand to continue growing and eventually soften the oversupply and improve freight prices.
In addition to the freight oversupply hurting companies now, this glut may impact reefer freight for several years as companies choose to delay upgrading old reefers or investing in new technologies. It’s important to keep in mind that, in the long term, though, freight — especially cold chain freight — is improving. The U.S. market for cold chain transportation is projected to grow an average of 15.9% per year between 2023 to 2032.
Focus on Sustainability in Refrigerated Transportation
The real key to success in the refrigerated transportation industry is going to be building a more sustainable, effective business model. Even as a price squeeze makes it difficult for cold chain transportation companies to succeed, many are continuing to invest in new technologies to improve reefer transportation.
Enhancing Efficiency
The issue of sustainability is ever-present in the minds of refrigerated transportation companies. Trucking still largely uses fossil fuels, and keeping containers cold during transportation requires more power than non-refrigerated shipping. So it’s important that reefer companies are seeking strong solutions to make their industry more sustainable.
Minimizing waste is another way companies are becoming more sustainable. They are installing smart monitors and sensors that can monitor conditions and increase proactive monitoring that prevents shipments from spoiling.
Smart Technology
Innovation is everywhere and there are a lot of options for companies looking to make reefer trucking more sustainable. Many companies are installing intelligent temperature control systems that can both keep goods at a steady temperature and limit energy use to the lowest possible amount.
An option on many consumers’ minds is electric and hybrid trucks. Battery technology is improving daily and it’s reasonable to assume that we will soon have the capacity to build fast-charging, long-lasting electric and hybrid trucks that can go the distance while protecting the environment.
Intelligent Design
Some of those innovations are at the warehouse level, where large quantities of goods are stored before transportation. While traditional warehouses have large bays for loading and unloading, some new warehouses have dock doors that enable workers to position trucks so that no hot air enters the warehouse while loading trucks.
Continental Logistics, along with many of its partners, remains committed to improving sustainability and efficiency in the supply chain. They’re investing in new sensory and tracking technology to reduce waste and increase cold chain efficiencies. And, they’re helping shippers connect with more sustainable fleets through their large network of carriers. With over 50 years of experience and history in reefer shipping, Continental Logistics is dedicated to ensuring the longevity of the industry to make the next 50 years even better and more sustainable.
Continental Logistics Is Leading the Way In Sustainable, Resilient Reefer Logistics
The current conditions for reefer trucking are difficult for many companies. Low freight rates and high overhead costs are squeezing many freight companies. With an expected ease in prices in mid-2024, successful refrigerated freight companies are focusing on ways to make their systems more efficient, sustainable, and long-lasting. Continental Logistics can help shippers reach their goals by providing access to a suite of tools and expertise that can revolutionize a shipper’s efficacy. Ready to future-proof your shipping company? Contact Continental Logistics today.
