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This research report on the refrigerated trucking market in the US and Canada covers sizing and forecast, share, industry trends, growth drivers, and vendor analysis. The study includes insights by Service (FTL and LTL), Temperature Compartment (Single and Multi), End-users (food, pharmaceuticals, and others), Vehicles (Trailers and Vans), and Geography (the US and Canada)
The challenge of perishability and the need to preserve food and non-food categories at optimal temperatures to prevent spoilage are the major growth enablers for the refrigerated trucking market in the US and Canada. The growth in refrigerated warehouse capacities in the US and Canada has a positive impact on the refrigerated logistics market. Being geographically vast countries, the US and Canada need to have refrigerated truck transport and trailers for long haul transportation to avoid food spoilage, thereby influencing the market. The demand for temperature-controlled logistics continues to grow upward trajectory as perishable food items and medicines need to be maintained at optimal temperatures throughout the cold chain until they reach end-consumers. This demand pushes more opportunities for vendors to increase their investments that could benefit both refrigerated trucking companies and perishable food manufacturers as well.
Pharmaceutical products need to be maintained at a precise temperature to maintain their efficiency. Time and temperature are two vital factors to be taken into consideration when transporting medicines. Transporting biological materials such as blood, tissue samples, reproductive material, etc. must be carriage at a cryogenic temperature less than -150°C. Therefore, it is critical to transport clinical products under temperature-controlled trailers over a long distance. The pharmaceutical market in the US and Canada continues to grow at a steady rate of YOY. Hence, refrigerated trucking companies are exploring to deliver advanced solutions for biological researches, needing transportation of specimens, or even entire research labs at times. Therefore, pharmaceutical products are mandatory to be transported in temperature-controlled trucks becomes a driving force for the refrigerated trucking market.
- The agricultural sector generates over $38 billion annually, which is being supplied directly to food processing companies in Canada and other countries as exports. Hence, the increase in food exports is increasing the demand for refrigerated trucking and transportation.
- The presence of large beverage companies in the US is likely to fuel the demand for refrigerated vehicles as these companies rely on cold storage transportation facilities to deliver goods.
- The food and beverage industry plays an essential role in the US economy, which contributes 5% to the country’s GDP. The US food sector has a total sale of approximately $1.4 trillion, which includes food consumed at home, eateries, and restaurants. Hence, the rise in the F&B industry is projected to drive steady demand for refrigerated transportation.
- About 95% of new drugs that are coming in the market are developed and manufactured in the US. Therefore, the growth in pharmaceutical products requires proper temperature-controlled logistics, which, in turn, is expected to drive the market.
The refrigerated trucking market in US and Canada is expected to grow at a CAGR of over 4% during the period 2019–2025.
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Refrigerated Trucking Market in US and Canada: Segmentation
This research report includes a detailed segmentation by service, temperature compartment, end-users, vehicle, and geography.
Insights by Service
The refrigerated trucking market by less than truckload (LTL) is growing at a steady pace driven by end-users such as F&B and pharmaceuticals. The (LTL) industry in North America is composed of numerous vendors. The industry has high entry barriers across the region on account of the complexity of operating thousands of depots, driver shortage, and intricacy with respect to the spoke hub system used for pickup and deliveries. The growth of e-commerce has a high positive impact on the overall LTL industry. However, dry freight has a higher share compared to refrigerated freight. LTL carriers commonly employ covered or enclosed van trailers. The usage of LTL refrigerated trailers is less compared to dry freight LTL carriers. The majority of temperature-controlled transporting through LTL is limited to regional levels compared to inter-regional or national levels. Online retail is a major driver for the LTL segment. Also, several start-up companies are trying to disrupt the LTL, consolidate the market with new technology-based solutions to address the complexity associated with the LTL segment.
Capacity constraints on certain lanes are expected to increase rates in the full truckload (FTL) sector. The rate increase is expected to be more in FTL than LTL on account of long routers covered and the high usage of diesel. The FTL industry savings are more than LTL on account of less number of spoke and hub stations. Also, the long-term contract of the FTL industry makes it more operationally stable than LTL. However, the capacity constraint has forced shippers to look for a capacity guarantee to beat challenging market conditions.
Insights by Temperature Compartment
The single temperature and multi-temperature logistics segments supplement each other’s growth. Currently, single temperature refrigerated trucking services dominate the industry. However, the growth of multi-temperature refrigerated trucking services has been higher. Reduced weight and improved fuel economy are the characteristics of single-temperature refrigerated truck trailers. Local manufacturers meet a large part of the demand for transportation refrigeration units in the US. However, low-cost imports from China and Mexico are also available in the market.
The demand for multi-temperature refrigerated trucking service has high adoption in the F&B industry. The major growth enabler is due to the growth in online food and fresh produce delivery services. The increase in usage of a multi-temperature refrigeration system has given rise to operational efficiency.
Insights by End-users
The food & beverage industry dominates the reefer truck market. The logistics cost in the food industry accounts for 7−10% of the total product cost. The increasing number of quick-service restaurants and retail outlets has fueled food consumption, which has increased the demand for chilled and frozen food and beverages. Foods that are expected to see high demand for packaging include organic foods, dairy, and meat. Scaling up of tier 2 brands in the US food industry is expected to bring high volumes, while larger food corporations will drive the steady need for refrigerated transportation. Canada is one of the most potential markets for launching new and innovative products due to its multi-ethnic society. Food consumption differs significantly across the country. Also, a vast majority of people are health-conscious, and hence, the market has observed an increased demand for organic food products that require refrigeration in their supply chain.
The refrigerated trucking market by pharmaceutical is witnessing steady growth as the industry is not characterized by many fluctuations concerning new products. The US dominates the North American healthcare and pharmaceutical industry. It holds many of the leading global pharmaceutical companies. The US alone controls about 45% of the global pharmaceutical industry. The US has the largest market in biopharmaceuticals that accounts for one-third of the global market. Transporting pharmaceuticals products requires proper temperature controls as several pharmaceuticals are temperature-sensitive and must be delivered on time. The slight change in the temperature can affect the chemical stability of the medicine and might alter chemical properties. Due to these implications, many pharmaceutical companies need to ensure that their products are transported under adequate temperature-controlled systems. Therefore, to maintain the quality of medicines and drugs, pharmaceutical companies rely on temperature-controlled logistics.
Insights by Vehicle
While refrigerated trailers reduce operating expenses by reducing fuel and/or power consumption, they are complex to manage. Vendors boost the trailer revenue by charging for loading and unloading, detention of tractors and trailers, fuel surcharges, and other services. The market for trailers is also dependent on inventory levels, customer needs, trucking capacity, and availability of the driver. The availability of long-haul drivers is a major concern both in the US and Canada. The FTL and LTL segment use trailers for delivering cargo. However, the utilization of vans is limited to the LTL segment. Since the FTL demand is currently high, and also the regional LTL demand is growing, the usage of the trailer is growing.
The vans market is expected to witness steady growth during the forecast period. Online grocery, food delivery, and beverages are the major end-user of this segment. A majority of the last mile deliveries and some regional deliveries of cargo takes place through refrigerated vans.
Insights by Geography
Chilled or perishable food items have multiple challenges in transportation; therefore, cold chain management is increasing its complexity significantly. Due to technical advancements, refrigerated trucks that can hold goods with multiple segments at different temperatures are gaining popularity in recent years in North America. Multi segmented refrigerated trucks can maintain different optimum temperature levels. Multiple temperature trucks are more particularly used for the retail application, where temperature-controlled models are required to replenish store stock with relatively small quantities from regional distribution centers.
Canada stands out to be on top as the largest country both in the production and consumption of food and beverages. Canadian organic food products are at the highest demand being exported across all major countries of the world. The agriculture and food and beverage processing industries in Canada contributes around 6.8% toward GDP annually. Quebec and Ontario hold leading two positions in agriculture and food and beverage processing industries.
Major products that are included in food and beverages are fresh and frozen foods, packaged foods, dairy products, chocolates, alcoholic and non-alcoholic beverages. The majority of the food and beverage manufacturers in Canada prefer refrigerated trucks to transport goods from their factories to distributors or retail outlets. Medium and long-distance refrigerated haulage are fast-growing sectors marching forward to deliver food and beverages at high quality in Canada. These refrigerated trucking services can be particularly well-adaptive low risk and high-value food and beverages shipments.
The spending on fruits, vegetables, and meat is increasing across North America. Millennials are an important and influential source of demand for the food and beverage market. Increasing marketing and engagement strategies on young consumers about upcoming trends in food and beverages pulls-in more revenue into this sector. Online sales and delivery at the doorstep are an added advantage that generates a high demand for temperature-controlled logistics.
Key Profiled Countries
Insights by Vendors
The US and Canada refrigerated trucking industry is large, fragmented, and highly competitive with thousands of FTL and LTL carriers. No single vendor dominates the market. The three major factors on which the competition is dependent include – tariff, capacity, and customer service. The competitive factors change as and when the market conditions change. For instance, in the low demand market scenario, the tariff for hire refrigerated trucking company becomes significant, while in the times of high customer demand, the capacity and service quality make become more vital. The pricing of a truckload refrigerated carrier is in North America depends mainly on supply and demand factors.
- H. Robinson Worldwide
- Americold Logistics
- B Hunt
- Knight-Swift Transportation
- DB Schenker
- U.S Xpress
- Lineage Logistics
- ABF Freight
- KLLM Logistics
- Prime Inc
- Covenant Transportation Services
- Stevens Transport
- Burris Logistics
- Total Quality Logistics
- Henningsen Cold Storage
- XPO Logistics
- Trenton Cold Storage
- RLS Logistics
- Matson Logistics
- Conestoga Cold Storage
- Agro Merchants Group
- Congebec Logistics
- Hanson Logistics
- Confederation Freezers
- Ruan Transport
- Atlanta Bonded Warehouse Corporation
- Alliance Shippers
- Midwest Refrigerated Services
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Key Market Insights
The analysis of the refrigerated trucking market in the US and Canada provides sizing and growth opportunities for the forecast period 2020–2025.
- Provides comprehensive insights on the latest industry trends, forecast, and growth drivers in the market.
- Includes a detailed analysis of growth drivers, challenges, and investment opportunities.
- Delivers a complete overview of segments and the regional outlook of the market.
- Offers an exhaustive summary of the vendor landscape, competitive analysis, and key strategies to gain competitive advantage.
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