Demand for temperature-controlled tools is usually at its highest throughout the summer season months, peaking proper round Independence Day. That’s when spot charges enhance and produce quantity peaks, however throughout the area of a month, quantity can drop by as a lot as 25%. From the beginning of July, the reefer market goes into upkeep mode till round three weeks earlier than Thanksgiving, when recent turkeys start to ship, and reefer capability tightens. Throughout the 143 days between these two main holidays, the reefer market sometimes lacks path, and spot charges steadily decline. The USDA Truck Fee report affords some steerage on demand in produce-growing areas and ports, however when added to different indices that measure client demand, a clearer image emerges. Beneath are some extra information factors to look at throughout the reefer upkeep interval.
The Nationwide Restaurant Affiliation’s Restaurant Efficiency Index (RPI) is a month-to-month composite index that tracks the well being of the U.S. restaurant trade, a number one client of temperature-controlled freight. The RPI index got here in at 99.6 in Might, down 1.3% m/m, and the primary time the RPI fell under 100 since January 2021. Readings under 100 point out the market is contracting. Restaurant operators’ outlook for gross sales and the financial system has turn into more and more pessimistic in current months.
OpenTable’s world community of eating places and diners supplies a novel lens into the state of the restaurant trade and eating conduct. For the week ending July 10, the variety of seated diners in U.S. eating places was 3% decrease than final yr’s corresponding week.
The TIndex from Technomics, a worldwide chief in enterprise intelligence within the meals and beverage trade, reported that the Might TIndex elevated to 107.9, a 2.4-point leap from April’s quantity. This ends a three-month slide that started in February for the TIndex. Stronger development within the non-restaurant sector, significantly in journey, leisure, and healthcare, drove the rise. On a year-over-year foundation, the TIndex signifies that in Might 2023, foodservice gross sales grew by 5.0% nominally in comparison with the identical month in 2022.
Market Watch
All charges cited under exclude gas surcharges until in any other case famous.
Outbound linehaul charges within the Pacific Northwest are beginning to warmth up and, at a median of $1.72/mile, have elevated steadily over the past month as produce season begins to ramp up towards the November annual peak. In keeping with the USDA, weekly truckloads of produce are similar to the earlier yr. In Seattle, linehaul charges have elevated by $0.14/mile within the final month to $1.46/mile, with masses paying carriers $0.30/mile extra in close by Pendleton at a median of $1.75/mile.
In Houston, linehaul charges elevated by $0.04/mile to a median of $1.93/mile, whereas regional masses north to Dallas paid carriers $724/load or $3.00/mile, $40/load greater than final month. Hundreds east to New Orleans at $3.10/mile have been $0.36/mile decrease than the earlier yr.
Capability was tight for outbound masses in New Orleans, with linehaul charges up $0.47/mile final week to a median of $1.92/mile. In Chicago, spot charges firmed barely, rising by $0.01/mile to $2.14/mile, the fourth week of beneficial properties for outbound masses. At $2.41/mile, outbound masses paid carriers $0.10/mile extra final week in Michigan, with stable beneficial properties reported within the Grand Rapids market, the place charges jumped by $0.26/mile to $2.57/mile.
Load to Truck Ratio (LTR)
The reefer spot market is behaving a lot the identical because it did all through 2019 following final week’s 20% enhance in load posts and 16% enhance in provider tools posts. Each elements of the reefer LTR are inside 2% of 2019 as we begin the second half of 2023. Final week’s LTR elevated barely from 3.69 to three.83, nearly similar to 2019, when the LTR was 3.85.
Spot Charges
The reefer spot market erased the previous month’s beneficial properties following final week’s $0.04/mile lower. At $2.02/mile, the nationwide common linehaul charge is $0.26/mile decrease than in 2022, and just like the dry van sector, is inside a penny per mile of the three-month common.
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