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The Business of Reefer Trailers

While the United States is home to a vast manufacturing economy and many farms, all of that foodstuff and all of those finished goods need to be transported somehow. While jets can make fast deliveries over any terrain and huge ships can carry many tons of cargo to ports around the world, most carrier companies are small businesses that own fleets of semi trucks. A truck is slower than a jet and has limited cargo space, but these vehicles are quite affordable for any carrier company, and clients big and small make good use of them every single day. Besides, trucks don’t need train rails or airports to arrive at their destination. Those trucks can have a variety of trailers hitched to them, some of them generic, some designed for specialized cargo. For example, wholesale reefer units are popular, and even used reefer trailers can prove a good buy for any carrier company owner. So, what is a reefer trailer, anyway, and how can a buyer finance one smartly?

The Business of Reefer Units

In short, wholesale reefer units are refrigeration units that have air conditioning units built into them, so that they can chill their interiors. Such trailers also have insulated walls to help maintain that internal temperature, especially during hot weather. These reefer trailers may vary in size and weight somewhat, ranging from 29 to 53 feet in length where the tallest may be 13.5 feet tall and weigh an impressive 44,000 pounds. These can carry a lot of cargo for sure. As for the internal temperature, typical reefer trailers can generate an internal temperature anywhere from -20 to 70 degrees Fahrenheit, depending on the needs of the cargo.

It is safe to say that looking for carrier reefers to buy is a sound business choice in many cases, since the market for these trailers is enormous (and still growing). In the United States alone, over 500,000 wholesale reefer units are in operation, and more and more of them are ordered every year. In January 2018, for example, 40,000 of them were ordered. Worldwide, the refrigerated trailer market is valued at just over $5 billion, and estimates say that from 2016 to 2022, that market will hit a value closer to $7.65 billion. The industry is due to grow at a CAGR of 4.8% to reach that value sometime in 2022.

What are these reefer units carrying? Most often, they are used to deliver cold food items to grocery stores or other retailers that offer food, such as dairy, meats, frozen foods, and the like. Grocery stores make good use of these trailers, and cold food would simply spoil if delivered in regular trailers. Once a reefer pulls up to a grocery store’s dock, the crews there will unload cold items and put them into on-site cold storage. As for purchasing these units, a carrier company has some options to explore.

Buying Wholesale Reefer Units

A growing carrier company will need to expand its shipper options at some point, and buying wholesale reefer units is a fine way to add grocery stores to the list (aside from delivering dry goods for those grocers). To find suitable reefer units, the carrier company owner can look online for local units, either used, new, or both. A new trailer will cost more, though it will be in excellent shape and will come with factory warranties. A gently used trailer may be bought at a discounted price, though the buyer is urged to look it over first and test its cooling units.

How to finance a trailer? Big banks are reluctant to approve loans for small companies like these, since it’s a big risk. So, carrier company owners can turn to specialized truck lending firms, which do understand the risks and have more generous loan terms. Such lenders will look into a client’s financial history for red flags, and evaluate the borrower’s personal and business credit scores alike. A high score may mean financing up to 100% of the trailer’s value and at a low interest rate. Even borrowers with low credit scores can get loans, though with less favorable terms. And either way, the trailer acts as collateral for the loan, making it more attractive for the lender. It is considered a secured loan.