There’s a seasonality to the trucking world just like there is to any element of the fresh produce industry. For the Port of Philadelphia, late fall and the influx of produce from South America kicks off and drives what could be called peak reefer season on the spot market.
“You get to the winter months and you start to get produce out of the southern hemisphere,” says Dean Croke, DAT iQ industry analyst. DAT iQ is a data analytics service from DAT One, a truckload freight marketplace for North America.
“But we start to see a lot of our refrigerated trucks now gravitate towards the South American produce and that principally shifts to the port of Philadelphia,” he adds, highlighting that the port is now receiving high-value perishables such as Peruvian blueberries and Chilean grapes.
“It becomes a real harbor of activity that wouldn’t have been on many people’s radar until you start to see significant volumes start to land from South America,” Croke says.
With the need to move fresh produce when it hits the dock, he explains that the highly interstate-connected Port of Philadelphia is ideal for the time-sensitive task.
“The proximity of Philadelphia to probably 45% to 50% of the U.S. population is absolutely key to why Philadelphia is sort of that epicenter of produce for South America,” Croke says.
Regional reefers by the numbers
According to Croke and DAT iQ data, outbound reefer volumes during the week of Thanksgiving were up 16% compared to the same time last year, with spot rates up 4% to average $2.25 per mile. They came down a little in the first week of December, Croke says, to just 10% and 2% respectively. He also notes there is currently an oversupply of trucks in the market, which is suppressing national spot rates.
But those nationwide numbers don’t tell the whole story, he adds.
“The high-volume lanes give you a little bit better read on where the volume goes,” Croke says. “Chicago’s the No. 1 lane for all of that produce that comes into Philadelphia. Volumes are up 33% year over year. Rates are up 7% year over year.”
But things can also fluctuate wildly this time of year depending on other local conditions as well, he adds.
“If it gets freezing cold, rates are going to go through the roof,” Croke offers as an example. “Not because there’s more freight, but because everyone that ships laundry detergent and Coca-Cola will want a refrigerated trailer to keep them warm so they don’t freeze. It’s counterintuitive.
The combination of these local conditions, such as South American blueberries arriving at the Port of Philadelphia headed to Toronto during a freeze, can also cause rates to spike all of a sudden.
“You get all these sort of swings and ebbs and flows on the supply side and the demand side, and you have a lot of rate volatility that enters the market,” Croke says, describing it almost like a ballet. “It’s an unusual thing to watch, but there’s this sort of supply and demand balance that gets played out even at an hourly level, depending on weather when you get to this time of the year.”
