News

Refrigerated loadings rebound 0.6% in July

Refrigerated loadings improved better than expected in July and year-over-year growth turned positive. Refrigerated volumes improved 0.6% in July to 4.248 million. Volumes in the second quarter started off with strong growth but eased some during the quarter. The strong growth has helped to improve the year-over-year comparison with the strongest year-over-year gain posted in July since last June, up 3.1%. Year ago comparisons should remain easier into early next year.

Recent history
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 two 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.

There was a small uptick in volumes during Q1, up just 0.3%. It was the first quarter-over-quarter gain since 2010. That was followed by a strong increase of 1.8% in Q2 – the largest increase since a 3.1% quarter-over-quarter gain in Q4 of 2010. Prior to April, Refrigerated loadings had remained solidly negative since last October on a year-over-year basis.

Outlook
The Q2 increase will help the refrigerated segment achieve its historical average of 1% growth in 2012. Still, this market is well below the industry average and will stay that way for some time. Positive year-over-year comparisons returned in July as we overlap a period of weakness that started last July and lasted until April’s surge. 2012 is now expected to grow 1.1%, followed by growth of 3.0% in 2013 and 2.7% in 2014.

Analysis
Reefer loadings growth rates should benefit from continued growth in consumption, the thinning of herds – occasioned by the record drought – and by new federal food regulations that will require tighter temperature control standards.

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