World trade in perishable refrigerated (reefer) cargo is forecast to grow to 215 million tonnes by 2015. Nearly half that volume (109 million tonnes) will be seaborne.
Despite the credit crunch and downturns, the reefer sector is still robust, and Drewry Shipping Consultants' Annual Reefer Market Review and Forecast for 2009 indicates that world trade in perishable reefer cargo will grow. The bulk of the reefer trade will be carried by container reefer vessels, says Drewry, explaining this is partially because there is limited - and reducing - specialized reefer fleet capacity.
"As a result of capacity limitations, the volume of cargo carried by the specialized reefer fleets is predicted to reduce from 35.5 million tonnes in 2007 to 32.0 million tonnes by 2015,” comments Nigel Gardiner, managing director. “Newbuild orders of specialized reefer vessels remain scarce. Of the top six operators who dominate this sector, only two have newbuildings in the pipeline meaning that only 16 vessels are planned for delivery between 2009 and 2014," adds Gardiner.
The rationalization has continued over the last year amongst reefer fleets, explains Gardiner. Some notable companies are also leaving the specialized sector. Clearly there is a capacity problem for specialized vessels, says Gardiner, whereas reefer containers have a real business opportunity if the former cannot bridge the capacity gap.
By mid-2008, the container reefer fleet boasted more than 4,500 vessels providing 11.4 million twenty-foot-equivalent units (TEUs). Container reefer capacity is predicted to grow by 69% to 2.5 billion cubic feet by 2013. The fleet of specialized reefer vessels (greater than 100,000 cubic feet) on the other hand stood at 789 vessels as of mid-2008, providing 271 million cubic feet of under-deck space.
This represents a reduction of 12% (in number of vessels) and 9% (in under-deck reefer capacity) from its peak in 1999. On current trends, this reduction will continue and it is estimated that the specialized reefer fleet will drop to just 642 vessels by January 2015.
Drewry’s Report also provides a comprehensive breakdown of the world trade of perishable reefer cargo by commodities. Total cargoes reached 153 million tonnes in 2007, up from 114 million tonnes in 2000. The fastest growing commodity was the ‘exotics group (pineapples, kiwifruit and avocados).
Imports of perishable reefer commodities into Western Europe have fallen in relation to the world-wide total – from 45% in 2000 to 42% in 2007. Likewise, imports into Far East have also fallen from 15% of the worldwide total in 2000 to 12% in 2007.
The single most-important commodity, from the perspective of the specialized reefer owners and operators, is bananas. Bananas can be shipped year-round and this enables reefer operators to employ vessels on an annual, or even multi-year, basis. In 2007, bananas equated to 22% of total seaborne perishable reefer cargo.
Oil prices have seen record highs during 2008 while food and commodity prices are soaring. The financial sector is in turmoil and exactly what effect this will have on shipping is still unclear. Equally, whether China’s boom lasts or will be stalled by falling demand in the West continues to be debated.
Reefer fleets are not immune to general operating cost factors that are becoming more acute, namely the perceived officer shortage and escalating wages, the big increase in the quantum of insurance claims and soaring raw materials costs on the repair market.