How reefer fleets can save during fuel's pricing surge

Speaker 1:
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Matt Cole:
Diesel prices have skyrocketed this year. How can reefer fleets lower their spend on fuel?

Jason Cannon:
Hey everybody. Welcome back. I'm Jason Cannon and my co-host is Matt Cole. Even before the US went on the military offensive in Iran in late February, diesel prices were headed in the wrong direction for trucking companies. Then once that conflict began, fuel prices went through the roof to a national average of more than $2 per gallon higher than they were at the beginning of the year.

Matt Cole:
Those costs, of course, are felt throughout the trucking industry, as every fleet has to put fuel in their trucks. But refrigerated fleets feel it even more having to keep fuel in those units as well. There are ways reefer fleets can control their fuel spend though.

Don White:
My name is Don White. I'm the vice president of Refrigerated Strategy and Solutions and worked for Ten Leasing. Ten Leasing was founded about four years ago. We're a group of leasing companies that came together to create one of the largest full service leasing companies in the country. I have been with the legacy company almost 15 years, and it's my 34th year in the refrigerated sector. Tin specializes in anything trailer. So we do reefers, dry vans, flatbeds, chassis, anything you could think of in the trailer world.

Jason Cannon:
So how much fuel does a reefer unit actually use?

Don White:
So typical rule of thumb for a single temp reefer unit is about 0.8 tenths of a gallon for every hour the reefer runs. And when we get into the specialized equipment, the multi-temp equipment, we can see about 0.9 to one gallon for every hour we run the reefer unit. And unfortunately, our shippers are asking us to create tighter temperature tolerances. So these units are having to run a lot more just to maintain that threshold that the shipper is wanting to see.

Matt Cole:
With shippers wanting tighter temperature controls inside the trailer, it's putting more pressure on those reefer units to run longer, which means more fuel is being burned.

Don White:
Again, we're seeing more and more of the shippers and the end users want that tighter temperature tolerance. And this has all came about, I think in 20 tenants started with the Food Safety Act. And basically it's the government telling us we want to be accountable for the temperature from the time that product, if it left the field to the time it got to the end user. So we have to keep, it might be one to two degree tolerance throughout that whole cycle. So our shippers are asking us to keep that threshold tighter and tighter. Well, that's great, but it does nothing for the operations when we're trying to maintain fuel consumption.

Jason Cannon:
It's important to know that reefer units aren't necessarily designed to lower the temperature inside a trailer, but rather to maintain it. So when produce gets loaded into a trailer from the field in the middle of summer, that unit has to work extra hard to pull the heat out of that product.

Don White:
Reefers are designed to maintain temperature, not remove temperature. So that's one of the biggest misconceptions there is in our industry. So whenever you introduce a warm product, and by warm, I mean warmer than the set point that the shipper intended to be. That unit is struggling to pull that heat out of that product so it's running more and more. Another thing that is affecting our operations is how we load the trailer. We have to have airflow in order for that unit to push that heat out of that product and back into the unit to push it outside. So everything from shrink wrapped too much to how it's too tight against the wall is affecting how this unit's going to run. And then if you have a product that's fresh out of the field like broccoli or melon, you're trying to take that heat out of that product that it can't do.

So it's causing more and more moisture consumption and more and more defrost. But when you defrost more, you're making that unit run longer and longer. So anything that we can do to prevent that and get that airflow that we need is going to reduce that runtime.

Matt Cole:
Age of a fleet's reefer units and the trailers themselves also make a big difference in fuel consumption.

Don White:
They're very much more efficient. And on the trailer portion, as the trailer gets older, the foam degrades in the walls of the trailer, which is basically like your house, your house has R-factor insulation. If you maintain that trailer properly and you fix all the holes in the wall, you're going to limit that amount of degradation in the foam. But if you have a puncture in the wall and you let it stay exposed, water is one of the most notorious things for killing our foam and our trailers. So anytime you introduce that water to the foam, you've lost that integrity or R factor. So the older the asset gets, the less thermoefficient it is. On the refrigeration side, it's just like a car. Everything has computer base now. So you can play with that computer to get those temperature tolerances where you need to be quicker.

You can reduce runtime. You can even take the driver out of the scenario and program the unit to haul it specifically what you are wanting to haul. The driver, say they're hauling dairy, just hits a button that says dairy on the reefer unit and they walk away. The unit is smart enough to take it from there and the driver doesn't worry about it until he delivers his load.

Jason Cannon:
If your fleet is running older trailers and reefers, Don says good maintenance is the best thing you can do to ensure efficiency.

Don White:
The biggest thing that you hit on is maintenance is making sure that that unit, the coils are cleaned in and out, making sure the trailer box is free of holes. And one of the biggest thing is your door seals, whether it's a roll up door or a swing door, make sure that those seals are in place and are tight. And the biggest way to check that is put yourself in the trailer, close the door. Do you see sunlight anywhere? We want to keep that heat intrusion from the outside going in. And beyond that, it was just making sure you're getting the right load for your specific piece of equipment. Every trailer is spec differently. You don't want to haul ice cream on a trailer that was designed to haul produce. So knowing your proper trailer spec goes a long way.

Matt Cole:
When it comes time to buy or lease a new trailer, keep these things in mind when specking.

Don White:
Whoever they're dealing with, whether it's a leasing professional or a trailer sales professional, ask 1,001 questions. And your salesperson should be asking you that also. They should be asking you, "What do you mainly haul? Are you forecasting that you're going to change your loads in the future? What's your average dwell time?" And by dwell time, I mean, how long is it sitting on your parking lot loaded? Could you introduce a hybrid refrigeration unit when it's sitting on your parking lot where you can plug it in and reduce that fuel consumption? Is there any specialty loading and unloading practices that you do? And the biggest is how many days a week and how many hours do you think you're going to run on that piece of equipment? Knowing that is going to help us forecast the exact piece of equipment that you're going to need and give you that versatility where you can haul a frozen one day and a fresh the next day.

Jason Cannon:
While California's had the wind taken out of its sails when it comes to some trucking emissions regulations, there are still transport refrigeration unit regulations upcoming.

Don White:
Unfortunately, in late '23, a new regulation came out where the reefer unit, if it was produced after June of 2023, had to be an ever compliant reefer unit. In the past, you had a seven-year lifespan of the TRU to get into California. That rule is gone. So basically now by 2030, that seven-year lifecycle is gone. Everything that goes into California will have to be the ever compliant unit, which unfortunately costs more and there is more maintenance to it. So that is a big factor of any fleet considering it going into California. It is basically the fuel technology going into the reefer and its carbons that it's putting out. One OEM uses a rail system and the other uses an EGR valve. So it's getting as advanced as your tractors and their emissions. They all still stay under the 25 horsepower that they need to, but now they're just getting into the more of the fuel consumption and the byproducts it's putting off.

Matt Cole:
Are electric reefers the next big thing?

Don White:
With our current administration, it's kind of paused, in my opinion. I think it will come back. Unfortunately, the cost factor is just so much to consider on these pieces of equipment. We're seeing trailers almost four times the cost of an average reefer unit. So without credits and rebates, it makes it really hard for that end user to deploy these assets right now. That is changing. We hope over the next couple years. Currently, we are testing a few of them and just making them more cost efficient is what it's going to take to get these things deployed. Then two, when we saw the change in administration, we also saw a change in these businesses that were upfitting these trailers. Some were closing, some decided to go other directions with the current state, so we need more players in this market to bring the cost down.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.