FedEx, which dominates LTL services with a ~20% market share, does not offer refrigerated truck (reefer) LTL. Neither do Old Dominion, the next-biggest provider, or Yellow Corp, which was 3rd by LTL revenue before its bankruptcy in August 2023. If the US has a fragmented cold chain in part because of reefer LTL’s absence, why don’t the biggest players in the industry provide it?
Long story short, LTL is difficult enough without refrigeration. When you rent truck space out to multiple customers, you introduce several optimization questions: How do you load, pack, and route trucks with variable cargo weights/sizes, un/stackability, multiple unloading destinations...the list goes on. LTL providers have managed the problem with the help of load optimization software, but the additional variables refrigerated goods add to the equation are crippling. In fact, we’ve spoken to software providers who don’t offer reefer LTL software at all, given the compounded challenges of optimizing for these additional variables: optimal temperature ranges, light sensitivity, humidity impacts, sensitive product excursion/tracking requirements, and more.
For transport companies, reefer LTL makes little economic sense. Unlike most goods, refrigerated products implicitly have decay curves. And, unless perfectly monitored, refrigerated trucks have temperature gradients —we’ve heard of companies paying extra to have their goods placed towards the bottom or the back, where heat is less likely to rise and spoil their goods and opening doors are less likely to create quick temperature spikes. This means that the most vulnerable goods, which would ideally be the first to be unloaded and delivered, may need to be packed at the back/bottom of the truck. So, trucking companies have to trade-off easy access with load capacity. The sacrifice of this trade-off is pushed to businesses and end-consumers. It can come in the form of high reefer LTL prices, or, in most cases, a total lack of reefer LTL services.
Solutions to the lack of cold chain LTL are few and far between. Most LTL providers offer passive cooling (insulated parcels with chemical-based gel packs), which works—if you don’t need guarantees. Without active parcel cooling solutions, businesses have to either 1) amass enough demand for their refrigerated product to fill a truck load before shipping or 2) pay a per-product shipping premium to ship an unfilled load. The former is inflexible. The latter is expensive. Both are highly emissive. Temperatures also vary across the summer and winter months requiring different pack-outs during each season. Without active cooling, businesses either have to double up on gel packs and pay for the excess weight, or halve their shipping time and pay expedited shipping costs. Either way, the cyclical cost variance can be frustrating.
In today’s logistics landscape, there’s a clear need for advanced active cooling systems within LTL trucks. Such solutions would eliminate some of the spoilage, inconsistencies, and unpredictable costs linked to passive methods. We at Artyc recognize the gravity of these challenges and are deeply invested in exploring these avenues further. We envision a world where these active systems smoothly blend into regular LTL operations, providing reliability for the whole supply chain.
If the complexities of cold chain LTL have affected your operations or if you're curious about how evolving solutions might fit into your logistics strategy, we invite you to set up a demo with us.