zoomIllustration. Image Courtesy: Pixabay under CC0 Creative Commons license
Despite moderating perishable seaborne trade growth, continued modal shift will sustain expansion in the containerised reefer trade and so support freight rate development, global shipping consultancy Drewry said.
Containerised reefer traffic expanded by 8% in 2017, outpacing the growth in overall seaborne reefer trade. The growth was mainly driven by the continued shift of cargo from the declining specialised reefer fleet to the container mode.
“This modal shift in favour of container shipping lines is expected to continue as the specialised fleet shrinks further,” Martin Dixon, Drewry’s director of research products, said, adding that the specialised sector’s share of total seaborne reefer trade is forecast to fall from 20% today to just 14% for 2022.
However, container equipment availability remains an issue, particularly in hinterland locations where carriers have been reluctant to reposition empty reefer boxes. Production of new refrigerated container equipment recovered in 2017 and the fleet is forecast to continue growing ahead of cargo demand, but despite this tight supply conditions are expected to remain.
Drewry estimates that average containerised reefer freight rates rose 3% in the six quarters to 2Q18, while average dry freight box rates fell 14%. This demonstrates that despite broader weakness in the container shipping market, reefer rates have held up, rewarding those carriers that have chosen to invest in the cargo segment.
Meanwhile, time charter rates for specialist reefer vessels recovered in 2017 from the previous year’s lows but have since come under pressure and are expected to remain so.
However, the growth in seaborne perishable reefer trade is forecast to moderate slightly over the next five years to nearer 3% a year, in part impacted by a looming trade war between US and China that will affect the reefer dominant westbound transpacific trade in particular.