Truck Topics

Reefer: Profit or Loss?

There have been some spirited discussions on the Open Forums lately concerning specialized handling-equipped trucks.  Part of the equipment list for specialized handling often includes temperature control systems more popularly known as reefers.

The primary question concerning reefers is:  Does the potential extra revenue justify the cost of this not inexpensive hardware? 

Some expediters say that yes, the temperature-control equipment is worth the cost to the owner-operator because it allows him access to high-value, extra-sensitive freight with typically higher rates.  It also gives the owner-operator greater flexibility of freight types, if for no other reason than the driver can take "normal" or "usual" expedited commodities as well as the special loads.

On the other side of the equipment fence, there are those who emphatically state that the owner-operator will never enjoy any appreciable return on investment and that, along with the outlay for equipment - particularly for a refrigerated box - the special handling involved in that type of freight is not fully compensated.

So, should the expediting owner-operator run one of these units or just run the other way?

Ben and Melanie Easters are tractor-trailer owner-operators who also have two straight trucks signed with their company. They have been pulling a temperature-controlled wagon for three and a half years and when asked, 'is it worth it?' Ben replies, "Yes, and actually, it's getting better.  We do a lot of work for paint companies, several chemical companies and some U.S. government loads.  These loads have produced very good revenue.

"We're going into pharmaceuticals now; we've been doing some and it's growing bigger.  We've had an additional probe added to the trailer for temperature validation.  We've been very happy with the way the reefer work has been." 

He continues, "I ordered the trailer as it sits.  It's a "Space-saver" unit that is almost the width of a regular trailer with a Thermo King SB 300 "Whisper" unit on it.  I can run it from +90 degrees to -25 degrees and keep it within five degrees of where it's set.  With my one and a half inch walls, I can fit full-size skids side by side down the trailer."

Ben states that most of his loads fall under the temperature-control category with the trailer temps kept between 60-70 degrees.  When the unit is running full speed it consumes one gallon per hour, but in normal operating mode, his 50-gallon reefer tank will last all week.

"We love this kind of work," says Ben. "The money makes it well worth the extra effort.  There's extra handling involved in this type of freight, but I see it as a challenge."

Panther II Recruiting Manager Adam Walter says that the temperature-control expedited freight market is expanding and that reefer-equipped contractors will find a variety of freight possibilities with Panther II.

"Generally speaking, any time an owner-operator can offer a wider variety of equipment to his carrier, he better enhances his freight opportunities and temperature-control is certainly a part of that."

"Panther II is always looking for contractors with the skills and experience that go into flatbedding, special services, government freight, temp control, etc., because it expands their ability to expand their revenue."

He adds, "The way that expediting is changing by the minute, and the way our company is growing, special services is definitely a department that is looking to grow."

Darin Mark is the Director of Recruiting for Landstar Express America and he states, "As with any accessorial equipment, the more you have, the better your opportunities to make it in this business.  With Landstar , you not only have Express America to draw from, but our other Landstar resources as well."

"I think the key to success with temperature-control equipment is the company the owner-operator is leased with.  In the case of LEA, we have government loads and other specialized handling type of freight that requires temperature-control, so there are enhanced revenue opportunities for reefers."

Don and Yvonne Gibson have been operating their temperature-controlled unit since October of 2004 and Yvonne says that, at least so far, the reefer has not been what she expected. 

"We've had a total of 15 reefer-type loads since we put the truck on and that's just not enough freight to justify the expense of this equipment.  Between the Kidron cargo box and the Carrier refrigeration unit, we have over $40,000 invested and we're not seeing the right kind of freight."

"Last year, we had plenty of temperature-controlled freight, but since we've had this new truck, it seems to have dried up.  I've had reefer units throughout most of my driving career, and this is the worst I've seen it for reefers."

Dave Corfman is a veteran expediter with past reefer ownership experience who echoes Yvonne Gibson's doubts about the financial viability of temperature-controlled equipment.

"At one time, I had a total of five reefer-equipped straight trucks leased to a carrier and I have to question whether the extra revenue that equipment can generate really justifies the expense, regardless of carrier."

"The upfront cost of the box and temp unit combined with the maintenance and upkeep are serious investments.  Tie that in with a carrier's policy of how long of a service life for a truck is allowed and it's questionable whether an owner can make his money back.  Not every load will require specialized handling
so the equipment will be unused at least part of the time."

"For new equipment, temperature-control can easily add $35,000 - $50,000 to the price of a truck - as I said, it's a serious investment."

The comments from the owner-operators here are not intended to be a scientific study, but rather the opinions of people with solid credentials as knowledgeable, expediting business people.

Perhaps the key to a better understanding of this issue is research and plenty of it.  There are reasons for both the positive and negative comments about temperature-controlled freight equipment expenditures and each prospective reefer owner would be well-served to gather the information he requires to make an informed decision on whether to run with it or run away from it.