New Mexico, US: The Truckload Carriers Association’s Refrigerated Division annual meeting in New Mexico heard that temperature-controlled operators are struggling to achieve premium rates from shippers despite delivering a premium service.
Operators of temperature-controlled equipment should be getting premium rates from shippers, but in many cases are not indicated in relatively low return-on-investment figures presented at the Truckload Carriers Association’s Refrigerated Division annual meeting last week in New Mexico, reports Truckinginfo web site.
A tractor and refrigerated trailer today costs about $200,000 compared to $182,000 for a tractor and dry van, said economist John Larkin, quoting survey figures during the opening general session. However, going rates give dry-van operators a 6.6% return on investment, while reefer operators get only 5.8%. That has caused some fleets to consider buying more dry vans because they can make more money with them, he said.
“You shouldn’t be bashful” in asking for higher rates, said Larkin, managing director at Stifel-Nicolaus. The more complex and expensive reefer trailer, plus the fuel to feed it and all the care the load gets en route, should be rewarded, and shippers should be told that.
Rates should also rise because of increasing fuel costs and pressures from new federal regulations which will exacerbate the driver shortage – something faced by all fleets and a topic of casual discussions among members during social functions.
some operators are finding limited success in collecting a “reefer surcharge.” This is primarily the fuel expense a trucker incurs in running the reefer unit while the load is enroute, and was one of the topics covered in a panel discussion of “accessorial costs coverage” on the meeting’s second morning.
“Shippers think they’ve overcompensated us on the fuel surcharge” for tractors, “so want to hold back on reefers,” said Steve Wutke, vice president of sales at Prime Inc., a panel member. Also, “They want one fuel surcharge to fit all. They don’t want to administer two surcharges.”
Shippers generally prefer to keep things simple and don’t want to be inundated with operating data, some observed. However, when asked to compensate the trucker for expenses, they then want to see the pertinent numbers.
