Reefer loadings up, outlook lower
April 5, 2012
Refrigerated volumes were revised lower starting in the latter portion of 2011. Volumes are now showing to have been relatively stable since a big drop in July. Loadings moved up a modest 0.2% in February to 4.170 million. The year-over-year comparison went negative, dropping 1.6%. Most of the recent weakness can be attributed to just 2 months. October and November saw month-over-month declines of 0.9% and 0.7%, respectively. December’s 1.1% gain was not enough to counteract all of that. The year-over-year comparisons have moved lower for much of 2012 due to the weaker start to the year.
Freight volumes were flat in 2009 after growing 4.3% in 2008 – one of the only sectors to show growth in 2008. Loadings were also flat for full year 2010, up just 0.1%. Refrigerated freight fell during every quarter of 2009 and then rose during every quarter of 2010 – leading to the 2 consecutive years of no growth despite substantial quarterly movements. Growth was also low in 2011, up just 1.6%. This is very typical of this market segment. Revised data shows that 2011 actually saw volumes decline quarter-over-quarter for the whole year, but the weak start to 2010 allowed year-over-year gains to be achieved.
Inventory rebuilds and increased consumer spending will move the reefer segment out of negative territory. By the end of 2012 we expect to be back to 2% gains for this segment, which is reasonably strong for this normally slow growing segment.
The outlook for 2012 moved lower on the basis of the weaker first half of the year. Growth in 2012 moved down from 2.2% to just 0.6%. Growth will then accelerate back above the 2% level, to 2.6% in 2013 and 3.0% in 2014.
A stable market
This is a more non-cyclical market segment and generally stays within a narrow band of +/- 5%. People always have to eat. We are now at the negative portion of the refrigerated cycle where its very low cyclical pattern keeps growth below industry averages. The same modest numbers look very good during a downturn when the other segments fall sharply.
As usual, the classically stable reefer market trails dry van growth. We continue to forecast the typical, slow upturn growth for this segment. Note, however, that a slew of new Federal food regulations expected sometime in 2012 could increase the requirements for temperature-controlled trucking.
U.S. Truck Loadings is the estimated number of truck loads originated in the United States plus truck loads that come to U.S. destinations from Mexico and Canada. It is tons divided by the average tons per truck. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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