Reefer container equipment availability will remain tight over the next few years which will impact shipping capacity supply and freight rates at seasonal peaks, according to Drewry’s latest Reefer Shipping Annual Review and Forecast 2019/20 report
Drewry said it expects the reefer container equipment fleet to maintain a CAGR of 4.5% over the next five years which is slightly ahead of anticipated growth in containerised cargo traffic but will not be sufficient to bring supply back into equilibrium.
By contrast, the reports said there remains ample supply of container ship reefer slot capacity on most trades, though certain routes with a high proportion of reefer cargo can experience tight space during seasonal peaks.
“While we expect container carriers to continue to improve the effective availability of reefer containers through more centralised inventory and imbalance management, Drewry’s data indicates that equipment supply conditions will remain tight,” said Drewry director of research products Martin Dixon. “With cargo owners increasingly reliant on container carriers to move perishable products, given the ongoing decline in the specialised breakbulk reefer shipping fleet, refrigerated shipping capacity could be constrained during seasonal peaks.”
Drewry estimates the volume of seaborne reefer cargo grew 3% in 2018 to 129M tonnes which was weaker than the 4.4% gain achieved in 2017 and the 3.5% average annual rate recorded over the prior 10-year period. The weaker trade development was driven by a slowdown in shipments of meat and poultry, fish, seafood, banana shipments and a contraction in deciduous trade.
Looking ahead, Drewry forecasts that worldwide seaborne perishable reefer trade will continue to expand but at a below trend rate of 2.7% a year to 2023. But containerised reefer traffic will expand at a faster pace as its share of the trade is forecast to rise from 81% in 2018 to 85% by 2023 as the specialised breakbulk reefer shipping fleet continues its contraction.
Mr Dixon said “Hence, despite a slowdown in the pace of growth in global seaborne perishable cargo trade, the additional boost of modal shift is providing container carriers with an attractively expanding market in reefer cargo. Excluding a particularly weak 2019 caused by certain one-off weather-related factors, forecast growth thereafter is expected to match that of the wider container shipping market with annual growth of around 4%. And together with tight container equipment availability we expect reefer container freight rates to continue to outperform dry box rates.”