Refrigerated trailers—known fondly as reefers in the trucking industry—are currently a scarce commodity even as vaccine manufacturers gear up to distribute medicines which will need low-temperature storage while being transported across the U.S. Averaging only about 16% for all of 2019, the national reefer rejection index (ROTRI) now stands at 48%, its highest level ever.
The ROTRI measures the rate at which carriers refuse to move a truckload which has been submitted electronically by a customer. This measurement signals that it is highly likely shippers will pay more for capacity in the near future, considering about one out of every two reefer loads is being declined by carriers.
Rates for shipping by reefer, which are at least 10% higher than dry storage vans, have been climbing steadily since May 1, rising by as much as 55 basis points in recent measurements.
This continued tightness in reefer capacity is particularly important as pharmaceutical companies Pfizer and Moderna release their COVID-19 vaccines which will need continual cold storage from manufacturer to pharmacy or doctor’s office. In fact, the Pfizer vaccine needs to be kept at minus 70 degrees Fahrenheit.
British company AstraZeneca, however, is poised to distribute a vaccine which will not need such cold storage. Regardless, spot rates for reefers are sure to push much higher as Americans begin to be vaccinated.
Spot rates had already increased by 20% year over year because of the high demand driven by stay at home orders which gripped the nation for several months this year. Those rates should only continue to rise, especially for reefers, as the winter months, and rising COVID cases continue to put pressure on trucking capacity.