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Tackling trade risks and supply chain uncertainty

The growth in the capacity of container vessels is continuing, with reefer capacity having increased by about 22% in recent years, which has an influence on, for instance, north-south trade for perishable cargo.

According to Emile Hoogsteden, of Port of Rotterdam, this growth naturally also has an impact on ports such as Hamburg and Rotterdam, “which need not only ample TEU handling capacity, but also depth and equipment to handle these container vessels.”

The Port of Rotterdam has invested 2 billion Euro over the past 3-4 years, while the private sector has invested 11 billion within the same period. “This hasn’t gone unnoticed, as the World Economic Forum chose Rotterdam as the best port in 2012 and 2013.”

The supply chain in a port needs to be highly efficient, flexible, safe and reliable, and the Netherlands is one of the largest exporters of many products, and Europe’s largest in the shipment of agricultural products.

“The industry has of course recently been confronted with the Russian boycott. The Netherlands was the source of 90% of the products shipped to Russia, and this will of course have an impact on both production and logistics firms in the long term.”

Andy Connell, Business Manager Special Projects & Industry Affairs at Dole speaking via skype from South Africa, said that producers need to understand the dynamics of the supply chain better to diffuse emotion from their decisions. “Ports also need to be fluid and to maintain fluidity. Perishable skills need to be upped, we need to find where the waste is and improve efficiency.”

Alexis Michel, head of CMA CGM’s Reefer Department since 2009 and Vice President of the Senior Container Logistics Group, affirms that since 2003, the volumes handled by the company at sea have registered a 3% growth per year. “This trend is expected to continue, and the total volume is forecast to reach 150 million by the end of 2018.”

In terms of supply, Alexis explains that there is an inevitable move taking place from conventional vessels to reefer containers. “The volume transported by reefers is growing for many products, such as bananas (from 48% to 65% expected in 4 years), citrus (from 60 to 63%) or exotic fruits (from 63 to 75%), and so on.”
This naturally results in an increased interest from carriers in investing in reefer container devices. “For a company like CMA CGM, which is highly involved in fruit and vegetables transport, we need to tackle issues such as transit time, reliability and sustainability. To this end, we need to be able to manage aspects such as the CO2 and oxygen exchange to extend the shelf life, as well as the cold treatment.”
CMA CGM vessels are currently equipped with USDA devices and more and more vendors are offering solutions to solve any problems, such as the monitoring of the cargo travelling from port to port.

According to Alexis, “it is important to think of logistics services as a chain from the farm to the consumer; thus, as part of that chain, we, as a shipping company, need to ensure reefer containers are delivered in a timely manner, while being able to closely monitor all costs.”

The three main aspects to take into account when it comes to expenditure in reefer containers are namely stevedoring, equipment and power supply, and “it is a real necessity for the shipping industry to take care of the costs and to influence the pricing.”

“My message to those of you in the sector is that something must happen if we want to keep the reefer container industry reliable, while offering a good service. Our motto today is no longer ‘Book or die’, but ‘Book and count, or die’,” concludes Alexis Michel.

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