Refrigerated Transport Market

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Part
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Refrigerated Transport Market

I. Refrigerated Transport Market: Market Size

The U.S. market size would be about $10.42 billion in 2018. This is based on calculations detailed in the attached Google doc.
  • According to MarketsandMarkets, the North American refrigerated transport market accounted for about 50% of the global market valued at about $15.5 billion in 2019.
  • This would mean that the size of the refrigerated transport market in North America would be $7.75 billion (50% X $15.5 billion).
  • Based on Technavio's report, the U.S. refrigerated transportation market will grow by over 13% CAGR between 2018 and 2022. The incremental growth in the period is expected to be about $6.570 billion. Based on these data points, the U.S. market size would be about $10.42 billion in 2018 (as shown in the calculations attached). However, this is a

Research Strategy

The research team conducted further research to find insights or statistics that would enable us to triangulate/calculate the market size of the United States refrigerated transportation market. Our research established that apart from the projected growth in the U.S. market, there was very little quantitative information regarding the United states market as most reports focused on the global market. We then searched through global and North American market research reports in the hope that they had provided the U.S. market share or any other data points that would be useful in our quest. We only managed to find the market share of the North American (U.S., Canada, and Mexico) refrigerated transportation market.

II. Refrigerated Transport Market: SWOT Analysis

The U.S. refrigerated transport market is strong is expected to grow steadily. However, it suffers from lack of qualified personnel. Below is a SWOT analysis of the market.

Strengths

  • The refrigerated transport market is strong in the United States and experts predict that it will continue growing exponentially. Technavio forecast a 13% CAGR for the U.S. market between 2018 and 2022.
  • This growth will be driven by the steady growth of the healthcare and food industries in the United States, which are the main users of refrigerated transportation. This has led to increased demand for refrigerated transportation.
  • For example, production of poultry and meat has grown from 93 billion pounds to 100 billion pounds between 2012 and 2017. Drug sales have also been rising by up to 6% during the same period.

Weaknesses

  • According to a report by Mordor Intelligence and annual reports for Swift Transportation and Marten Transport, the United States refrigerated transportation is experiencing an ongoing shortage of qualified drivers. The industry-wide driver shortage have increased recruitment costs and has subjected companies to increased payments/compensation costs due to competition to retain qualified personnel.
  • Mordor intelligence also reports that the U.S. refrigerated transportation market is experiencing challenges from "high fluctuations in the refrigerated trucking rates." Swift Transportation and Marten Transport also say that the industry is susceptible to changes in fuel prices and tax rates.
  • Based on Mordor Intelligence and annual reports for Swift Transportation and Marten Transport, it is evident that the fragmented nature of the industry poses a threat for companies in the industry. Apart from the high competition for labor, various competitive factors are impairing their abilities to be competitive.

Opportunities

  • The United States Environmental Protection Agency (EPA) is working on a legislation to reduce greenhouse emissions from transport vehicles in the country. While the initial costs are expected to be high, the organization believes that they will be offset by the potential fuel savings in the tune of $165-$175 billion. These new regulations present an opportunity to companies in the industry to reduce their costs and improve profitability.
  • According to Technavio, one of the trends in the market includes the "introduction of autonomous vehicles." Autonomous vehicles are self-driving vehicles that would reduce the number of drivers needed. This would present an opportunity to companies in the industry to significantly reduce their dependence on human drivers, especially with the current driver shortages.

Threats

  • As aforementioned, the U.S. refrigerated transport market is highly dependent on two industries: healthcare and food. Therefore, the survival of the market would be threatened by negative performances in any of those industries.
  • According to annual reports for Swift Transportation and Marten Transport, it is evident that the U.S. refrigerated market is highly regulated. Companies are licensed and regulated by various local, state, and federal agencies whose regulations on safety, operating methods, and equipment. Violations may attract huge fines and the industry is at risk of being adversely affected by alterations to existing regulations.

Research Strategy

  • The research team could not find any readily available SWOT analyses of the U.S. refrigerated transportation market. Our research entailed searching through media/news reports, expert sentiments, market research reports, and annual reports of several publicly-owned companies in the space. Therefore, we leveraged various market research reports and annual reports and compiled an analysis based on the available information.

III. Refrigerated Transport Market: Trends

Labor shortages and autonomous vehicles are among the trends in the U.S. refrigerated transportation market. Below is an overview of the findings.

Labor Shortages

  • According to Mondor Intelligence, driver shortage continues to pose challenges to the industry. This is coupled by the rapid decline in mechanics and technicians for refrigerated equipment. This trend is having a negative impact to the growth of the industry despite various solutions including increased wages and other benefits.
  • This is a trend because it has been affecting the industry for several years now and it is affecting the whole transportation industry. Swift Transportation and Marten Transport, state that driver shortages have been affecting the refrigerated transportation industry for a while now. Also, Technavio points it out in its report.
  • According to Mondor Intelligence, there were 40,457 less truck drivers in the United States in Q2 2015, a number that rose to 296,311 in Q2 2018. More recent reports that driver shortage was still a problem in 2019.
  • Transport Topics reported that Recruitment VP Wayne Cederholm of C.R. England's (America's largest refrigerated transportation company) had 500 fewer drivers than it needed in 2018.

Autonomous Vehicles

  • According to Technavio, the introduction of self-driving is among the major trends in the U.S. refrigerated transportation market. Autonomous vehicles are self-driving vehicles that do not require human drivers. This is a new trend in the refrigerated trucking and the overall refrigerated transportation markets.
  • This is a trend because it has been mentioned in various industry-specific sites and also because Technavio, a reputable market resource, identifies it as a trend. Another report by UC Berkley predicts that driverless vehicles are the future of the American trucking (refrigerated or otherwise) industry.
  • While no refrigeration transportation industry experts are discussing the trend, Steve Viscelli (an expert in autonomous vehicles) and COO Shawn Kerrigan of Plus.ai. (a manufacturer of self-driving trucking technology) consider them to be the future of the American refrigeration trucking industry.

Research Strategy

The research team found information on the trends in the refrigerated trucking market in the United States. While there was no detailed reports on the trends in the overall refrigerated transportation market, the research team explored several reports including one from Technavio that established that the same trends affected the whole industry. We have combined data from the refrigeration transportation industry and the trucking segment to provide this report. Since most data was gleaned from market research reports, it was difficult to find sentiments from industry experts. However, we have provided sentiments on experts in other related fields for the second trend.

Sources
Sources