How Refrigerated Carriers Are Like Landscapers
Landscapers in northern states charge more in the summer because there is a high-demand for their services. Smart homeowners looking for a deal hit them up in October or November, when demand sags but before the snow arrives.
That winter jacket you wanted is unaffordable in January. But if you can hold off, you’ll get a steal in the spring.
Air fares to Florida are extremely expensive during spring break week. If you can postpone your visit until the summer, you’ll fly dirt cheap.
Examples of supply and demand pricing are all around us. Smart shoppers who can be a little flexible have the potential for huge savings. And guess what? Pricing for refrigerated carriers is no different.
Produce growing seasons trigger huge carrier rate spikes at different times in different parts of the country. All you—or your freight brokers—need to do is time your freight accordingly.
Adjust Timing to Save on Headhaul Runs with Refrigerated Carriers
At some point, maybe many points, during the year, your need for reefers in origin markets will coincide with a peak produce shipping season. In these cases, you may pay more. The question is, how much more?
To lessen the financial sting, flexibility and advance planning is key. According to Mike Reding, a refrigerated carrier expert at Redwood Logistics, there is very little a broker can do if shippers want to move product immediately. He adds, “But if the shipper can anticipate requirements 7-10 days in advance, we can reach out to a broader base of carriers to get a better deal.”
Flexibility is another cost-saving virtue, according to Reding. “Flexible ship windows let us get creative. For instance, we might combine an outbound shipment with an inbound reefer load that we are managing into that market.”
Refrigerated carriers, like any business, will capitalize on urgency to command a premium. Plan ahead and don’t allow your urgency to translate into a carrier’s enhanced profit margin.
Don't Forget About Inbound Opportunities
Market forces that work against you when you are shipping out of certain regions during peak produce shipping season, can actually work for you when you are shipping INTO these same markets. The reason: refrigerated carriers want to get their equipment into these high-profit markets and will offer very aggressive deals on backhaul runs to do so. Even dry freight shippers can see 6-17% savings from switching to reefers for loads bound for hot produce-shipping markets.
Partner with a Broker with Solid Analytics to Maximize Savings
They key to managing your costs for refrigerated shipping is in understanding freight demand data and trends. Here a broker can be your best ally. But it has to be the right broker. Here’s what to look for:
Expertise in refrigerated shipping, with staff dedicated to building and maintaining a broad base of refrigerated carriers.
Sophisticated systems that store data on available carrier capacity and then match that data with load demand. Most brokers take the opposite approach: Book the load and then work the phones and load boards to find capacity—that’s an old-school approach.
Proactive recommendations based on analytics. Modern brokers will maintain historical data on freight demand during peak produce shipping seasons. With that data, they can forecast capacity and proactively suggest strategies to minimize costs.
Refrigerated carriers are like good landscapers in northern climates: during peak demand times their availability plummets and their rates skyrocket. By working with the right freight broker, you can predict and navigate these price fluctuations to reduce your costs, while still securing the scarce reefer capacity that you need.