Refrigerated carriers face high fuel costs as the Iran conflict continues

To call the conflict between the U.S. and Iran “ongoing” would be an understatement. Since the end of February, there have been failed peace talks, closures and openings of the Strait of Hormuz, presidential threats, brief ceasefires, missile attacks, and more.

As of April 27, Iran has offered to remove the blockade on the Strait of Hormuz pending a proposal with the U.S. regarding Iran’s nuclear program. According to AP News, it’s unlikely that Trump will accept this proposal, so the strait blockade will likely continue. 

Due to the Strait of Hormuz’s importance to the transportation of traded oil and gas, its blockade has resulted in skyrocketing fuel prices for the U.S. Diesel prices the week of April 27 averaged at $5.351, almost two dollars more than the average from this time last year, according to the U.S. Energy Information Administration (EIA). Gasoline prices the week of April 27 averaged $4.123, almost $1 more than the average from this time last year. Even once the conflict does end, experts say it could take weeks, if not months, for fuel prices to stabilize. 

The high fuel costs are hurting all fleets, but refrigerated fleets are especially suffering. 

Why rising fuel prices hit reefer fleets and cold chain operations harder

To maintain specific temperatures, refrigerated trailers and units burn more fuel than standard trucks. According to Don White, VP of refrigerated strategy and solutions for the Transportation Equipment Network (TEN), this never changes, no matter what fuel prices are. 

Trailers “have to run and maintain temperature and compliance no matter what,” White told FleetOwner. “So our refrigerated trailers burn fuel for every hour of runtime, and for every hour on a regular single-temp operating trailer, we see about 0.8 gallons of fuel consumed.”

Refrigerated units have two different modes for temperature regulation. Continuous is when the unit never shuts off as long as the trailer is moving, so fuel is burned continuously. The start-stop mode shuts off the unit when the temperature is maintained and restarts it if the trailer begins to heat up, White explained. The continuous mode typically burns fuel faster than start-stop mode. 

Refrigerated units consume off-road diesel, a red-dyed fuel that is tax-exempt. While this makes it sound like refrigerated fleets pay less for fuel, it’s only part of the picture. While off-road diesel powers refrigerated units, refrigerated fleets still need on-road diesel for tractors. On-road diesel is the typical fuel trucks use and is taxed as usual. This means that even though off-road fuel is cheaper than on-road fuel, refrigerated fleets still pay more for fuel than dry van or flatbed fleets, since they require both.

Fuel-saving strategies for refrigerated fleets during price spikes

There’s nothing a fleet manager or truck driver can do to change the current high fuel prices. But there are steps they can take to lower fuel consumption for their fleet. 

Driver training practices that reduce reefer fuel consumption

On the road, driver behavior can help lower or increase reefer fuel consumption. 

“The biggest thing is to stay out of the trailer,” White explained. “The more times you open and close that door, you're introducing warm air into the environment.” White said that this is important for truck drivers and warehouse employees to remember.

Additionally, a driver setting the unit to an incorrect temperature or the wrong mode can drive up fuel consumption, White explained. Drivers either need to be properly trained on refrigerated equipment, or technology needs to be used to avoid human error. 

Technology tools that improve fuel efficiency and temperature control

Specifically for TEN’s refrigerated equipment, White said they use technology to set temperatures and avoid errors.

TEN refrigeration units "have a software embedded in them that allows us to create a program for that unit to run on,” White explained. “So if a client is hauling cheese or dairy, we'll actually go in and create a program that will say ‘cheese’ to the driver. So if the driver is hauling cheese, he pushes the button that says ‘cheese’ … It takes the driver out of the scenario altogether.”

How pre-loading temperatures affect fuel consumption and efficiency

According to White, the temperature of the trailer and its products, both before and during loading, can affect how much work a unit has to put in. 

“Refrigerated trailers are designed to maintain temperature, not remove temperature,” White said. “If you take, for instance, a melon out of the field at 80 degrees, that whole trip it's trying to pull that heat out of that melon, and it's not designed to do so. It's only designed to maintain temperature.”

To reduce excessive fuel consumption, White recommends pre-cooling products before they’re loaded into trailers. 

New reefer equipment and trailer maintenance improve fuel efficiency

While more costly, newer trailers and refrigerated equipment can burn less fuel than older, possibly faulty equipment. 

“Refrigerated trailers have foam insulation that degrades over time,” White said. “So as the trailer gets older, its ability to maintain temperature diminishes. And if a trailer also has damage done to it, and the damage is not repaired properly, water intrusion takes place, and water is one of the most damaging components to the foam of a trailer.”

During periods of fuel price volatility, fleets have to weigh the costs of using old equipment against the costs of buying expensive new equipment. If fleets do have to work with older equipment, regular maintenance and inspections can help identify damage that could affect fuel consumption, allowing it to be fixed.