Refrigerated loadings flat in Q1
May 3, 2012
As the economy grows more rapidly, food demand will pull the refrigerated segment back into positive growth rates. In addition, growing international demand for American food could add another 100 basis points of growth. Refrigerated volumes moved up just 0.1% in March to 4.133 million (the prior four months were revised lower). The revised data pulled the year-over-year comparisons much more negative, dropping 2.0% in March and pulling the next 3 months well below zero.
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. 2011 actually saw volumes decline quarter-over-quarter for the whole year, and revised data shows that there was no growth to start 2012.
Economic inputs have changed the number of loadings estimated for the first quarter, moving it significantly lower than originally thought. We have trouble believing this is a true reflection of the current market, but are committed to using the best data available. Despite this downgrade, our outlook is relatively unchanged, except for a lower growth rate in 2012 simply due to the impact of a lower starting point for the year. We should continue to get modest monthly growth in 2012 with positive year-over-year comparisons by the middle of the year.
Growth in 2012 moved down from +0.6% to a decline of 0.5%. Growth will then accelerate back above the 2% level, to 2.4% 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.
Click the link below to print a print-friendly page of the this analysis.Print Page
Use our chart creator to generate charts using the data that was used in this analysis.TruckGauge Chart Creator
This functionality is only available to Premium Members. Please upgrade your account to gain access to the data used in this analysis.Upgrade to a Premium Member