Chart of the Week: Reefer Outbound Tender Reject Index – USA, USDA Produce Truckload Spot Rate – Los Angeles to Dallas, Reefer Outbound Tender Reject Index – Los Angeles SONAR: ROTRI.USA, AGRATE.LAXDAL, ROTRI.LAX
It is widely known at this point that the winter plunge that hit the central U.S. a couple of weeks ago sent shockwaves through trucking networks that are still being felt throughout the country. As dry van capacity has somewhat started to recover, reefer capacity has become even more scarce as national reefer rejection rates once again hit an all-time high, topping 50% this past week. Somewhat surprisingly, this capacity crunch is located largely in areas that the storm did not directly affect, such as Southern California.
Though prone to wild swings in price just about any time of the year, the cost of temperature-controlled or reefer capacity does not typically see this level of increase in tightness and spot rates until early April into June. Historically, that is when several produce harvests begin in earnest out of the state.
At this time of the year, most of the produce that is sourced from California like lettuce, peppers and tomatoes originates from other parts of the world. Most of the lettuce production — one of the state’s largest crops by revenue — has moved to Arizona, where conditions are better during the winter months. Crop-rotation regulations also make it necessary to relocate some of this production….