COVID-19 Effects on Refrigerated Trucking Volumes, Rates, and Availability

Introduction

According to the Centers for Disease Control and Protection, coronavirus disease 2019 (COVID-19) cases started rising significantly in early to mid-March. In response, States across the country implemented stay at home orders that shutdown businesses and kept consumers at home. According to USDA's Economic Research Service (ERS), the combination of shutdowns and shifts in consumer demand has affected fresh produce markets. ERS's April 2020 Vegetables and Pulses Outlook stated, "[f]ollowing an initial demand surge as worried consumers rushed to fill pantries, a new temporary market paradigm has formed where the vast majority of food now funnels through brick and mortar retailers and online grocers (at-home and away-from-home shares had been roughly equal)."
The analysis provided below uses refrigerated truck movement, freight rates, and availability data from USDA's Agricultural Marketing Service (AMS) to assess how Covid-19's impact on specialty crops markets has affected the supply and demand of refrigerated trucking. This analysis was first published to USDA's Agricultural Transportation Open Data Platform on May 21, 2020, but the underlying data and charts will continue to update. Check back each week for the latest data.

Impact of COVID-19 on Refrigerated Truck Volumes

At the National Level

The chart below shows reported refrigerated truck volumes compared to recent years. The initial surge in demand described by ERS is apparent. Volumes were low at the start of 2020 compared to 2018 and 2019. Volumes increased somewhat through early March and spiked during the week ending March 24 (week 12), surpassing the same week in 2019. After that initial surge, volumes then declined significantly through mid-April. In the following weeks, there was some recovery, though volumes were still below prior years, and it is difficult to distinguish whether increases were in fact from recovery, or rather, from expected seasonal, springtime increases in volumes.

Which commodities typically move in which regions during the second quarter?

The national trends shown above represent sums of volumes or averages of rates and availability across regions and commodities. There are many different ways to slice the refrigerated truck data. A few selected views of region- and commodity-specific volume and rate trends are shown below. However, the charts above include interactive filters on region and commodity that you can use to view any of the many possible breakdowns of the data.
The two charts below look at refrigerated truck movements that were reported in the months of March through June over the last 5 years. By showing the top commodities (left) and regions (right), the two charts provide a sense of what typically moves by refrigerated truck during this time of the year and from where. The top four commodities during this time period from 2016-2020 are potatoes, watermelons, apples, and dry onions. The top four regions during this time frame are typically from California, the Pacific Northwest (PNW), Mexico through Texas and Arizona, and Florida.

Impacts in Key Regions

The charts below break out recent trends by region, including the top four volume regions: California, PNW, Mexico border, and Florida. While the details of the orders varied, each of these regions implemented shelter-in-place orders around mid-to-late March, 2020. California's shelter in place order went into effect on March 19. Similar orders went into place in Washington and Idaho (the top two PNW districts) on March 25. Texas and Arizona (the two districts in the Mexico border region) implemented similar orders on March 19. Florida limited restaurant capacity on March 17 and shutdown non-essential activities on April 3.
Refrigerated truck volume patterns varied over time and across origin regions. Reported volumes in the California region did not show the same atypical mid-March spike that the other regions experienced. However, California volumes were steady in the week ending March 31 (week 13), at time of year when they normally would increase. California volumes started the year above 2016 and 2017 volumes but then fell below those years between the weeks ending March 31 (week 13) and April 14 (week 15).
The spike-drop pattern shows up much more strongly in PNW, and to some degree in the shipments from the Mexico border. Of the four regions, volumes in PNW deviated most significantly from their seasonal norms. While Mexico showed similar patterns to PNW in 2020, there was a lot of variation in week-to-week and year-to-year volumes. However, Mexico volumes fell significantly below their 5-year average during early April, before recovering to more typical levels. Florida volumes also dropped below average in late March, and despite week-to-week increases in volumes, stayed below average through April.

Impacts on Volumes of Key Commodities

One fact to note about the refrigerated truck volume data is that they show only shipment origins. Covid-19 shutdowns had major effects on the consumer end of the supply chain, affecting consumer spending, as well as restaurant and retail closures. Some of these destination effects will get averaged out at the origin-only level. However, some of the consumer-related effects will show up more clearly in the commodity aspects of the data. As ERS's Vegetable and Pulses Outlook points out, some commodities are heavily used by the food service industry (also see ERS's U.S. Food Commodity Availability by Food Source, 1994-2008). For instance, potatoes are heavily used in french fries, and onions are heavily used in food service sandwiches. The top four commodities by volume during the months of April to June over the past 5 years (2016-2020) were potatoes, watermelons, dry onions, and apples, and each of these commodities shows unique Covid-19 effects.
Potatoes increased significantly in mid-March 2020 but declined to normal levels through April. Dry onions and apples closely followed the total trends seen above, spiking mid-March, falling to a low point toward the end of the month, but rising closer to normal levels in April. Watermelons showed the least influence of Covid-19 trends, not significantly deviating from prior-year March and April volumes.
The final chart below examines to what extent these top commodities drove the total trends seen above. It shows total volumes without these top commodities. With these top commodities removed, the initial March spike in volumes disappears. However, volumes still dropped significantly during the week ending March 31 and then slowly rose back to initial 2020 levels through April.

Impact of COVID-19 on Refrigerated Truck Rates and Availability

National Rate and Availability Impacts

The refrigerated truck rate and availability data shows similar patterns to those seen above in the volume data. The chart below shows average rates per mile in 2020 compared to recent years. Rates declined from the start of 2020 through early March. Similar to the volume data, although slightly earlier, average rates spiked during the week ending March 17 (week 11) and peaked for the week ending March 24 (week 12). After the peak, average rates mostly decreased week to week through mid-to-late April, landing below 2017 during the week ending April 28 (week 17).
The same pattern shows up in the availability data with a significant spike (more shortage) in the week ending March 17, 2020 (week 11) and a trough only 2 weeks later (more availability), followed by a return to adequate availability in April.

Impacts on Rates of Key Regions

The trends in rates also vary considerably across origin regions. In the California region, rates increased through the week ending March 24, 2020 (week 12) and stayed relatively high through the peak during the week ending April 14 (week 15). However, during the week ending April 21, rates in California dropped significantly.
A somewhat similar pattern has occurred in the PNW, where rates initially rose during the week ending March 17 (week 11), peaked in the week ending March 24 (week 12), fell somewhat through April, but then fell significantly as of April 28 (week 17).
The same initial mid-March spike in rates occurred in shipments from the Mexico border and from Florida, including a return to initial levels toward the end of the month. However, rates on Mexico border shipments stayed steady through April; whereas in Florida, rates increased.