Electric Reefers Will Soon Hit the Roads
If you grew up in the ’60s or ’70s like I did – or if you’re an avid Profit Trends reader – the word “reefer” may bring a certain plant to mind…
But the “reefers” I’m talking about today are refrigerated semitrailers.
There’s a big change coming in the world of reefers. And it’s one that caught my attention as a possible future investment…
Trucking is a big business here in the U.S.
There are roughly 3.6 million truck drivers. About 1.5 million of them do local deliveries.
The other 2 million or so drive semitrucks. These drivers haul everything we use. They move gasoline, diesel, lumber, cement and steel beams, for example. In fact, they haul just about anything else you can think of. (And plenty of things you can’t too.)
Some cargo – such as hazardous chemicals, fruits and vegetables – has to be kept at a set temperature. And that’s the job of the more than 500,000 reefer semitrailers that travel U.S. roads today.
Most of these reefers have a temperature control unit on the front of the trailer. These units have small, diesel-powered engines that drive compressors.
A 50-gallon diesel fuel tank is mounted underneath the trailer. And a reefer typically needs its fuel tank filled twice a week to keep the temperature control unit running. The colder the truck needs to be, the more fuel it uses.
Today’s diesel-powered temperature control units burn 10 to 20 gallons per day. Doing a little math, we find that the roughly 500,000 units burn somewhere between 1.8 billion and 3.7 billion gallons of diesel fuel annually.
Manufacturers in the U.S. sell about 50,000 new diesel-powered temperature-controlled reefers every year. But there are new developments on the way…
And I can sum it up in one word: electrification.
Reefers Are Going Green!
The diesel engine on a temperature control unit reefer can be replaced with an electric motor. And replacing 500,000 diesel-burning units with electric ones is no small feat.
The big takeaways here are that this change could save a lot of fuel, reduce fuel-related costs and reduce greenhouse gas emissions.
The average electric temperature control unit uses 6 to 9 kilowatts of energy. And that can be supplied from several sources.
For example, solar panels can be mounted on the trailer roof. And on the front of the trailer, battery packs can be mounted below the temperature control unit.
Traton Group (OTC: TRATF) is one such company that uses roof-mounted solar panels to power its Catalist SuperTruck – a project partially funded by the U.S. Department of Energy.
Right now, electric temperature control units are being made in small quantities. This year, we should see about 1,000 of them hit the road in the U.S.
The good news is that existing reefers can be retrofitted with electric temperature control units.
I believe this is an exciting segment to watch. Within a year or two, we should see some of the major temperature control unit manufacturers, like Trane Technologies (NYSE: TT) and Carrier Global Corporation (NYSE: CARR), coming out with electric temperature control units.
Reefers are going green. And you can bet I’ll be closely following this aspect of the electrification revolution.
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