Following the release of its eleventh annual reefer analysis, Dynamar Shipping Information and Consultancy indicates that worldwide volumes of refrigerated trade reached a new high of 169.2 million tons in 2019, according to provisional figures, indicating a growth rate of just below 2% when compared to the previous year’s volumes of 166.5 million tons.
Of the total volume of refrigerated trade in 2019, Dynamar estimates that the seaborne reefer trade of fruit, vegetables, meat, fish and dairy, but excluding pharma, flowers and other commodities, is estimated to have grown bay close to 2% to approximately 121.5 million tons. The 2019 growth figure was below the long-time average due to extreme weather conditions in various parts of the world that year. However, this was offset somewhat by extra trade that was generated by the swine flu epidemic in China, leading to a much higher demand for pork.
The demand growth in China was reflected in the provisional figures, which indicated Chinese meat imports had risen by around 46% year-on-year. Strong growth was also reported in fishery products and fruit, while other major growth areas for refrigerated trade included Ecuador, with banana exports increasing once more, Brazil, on the back of strong meat exports and South Africa.
The longer-term pattern of the decline in conventional reefer shipping continued through the year, with the number of port calls at major reefer destinations dropping yet again, however, the rate of decline had slowed considerably when compared to 2018. In particular, the conventional reefer vessel has maintained its presence in Africa and New Zealand, with port calls in these regions with port calls falling by just 4.9% in Africa and rising by 2.5% in New Zealand. This compared to decreases of 7% and 6.2% recorded in 2018.
In the container sector, the overall reefer plug capacity of the fleet increased had increased by 2.6% between July 2019 and July 2020 to reach 2.48 million, while as of July 2020 the total TEU capacity of the containerised fleet amounted to 23.47 million TEU from 5,300 vessels.
2020 Report:
In the report, the authors indicated that, in comparison to 2019, the reefer market through 2020 saw a considerable amount of upheaval, especially in the early months, as a result of the corona virus pandemic. Difficulties began in April with suppliers facing disruption in getting fresh produce to the relevant ports. Lower warehouse productivity on the back of working, social distancing and travel restrictions caused longer lead times and a reorientation of ordering and inventory processes.
In the containerised segment, the main challenges were as a result of reefer container equipment being caught up in port disruption and the difficulties shippers and carriers had in repositioning refrigerated containers. As a result, reefer containers began to stack up in Chinese ports. Consequently, carriers announced the introduction of congestion surcharges for reefers in the region of 1,000-2,000 TEU per box. Additionally, some containers were diverted to other ports or delayed by the ever increasing amount of blanked sailings.
Yet, the disruption to the containerised segment generated some positivity for the conventional segment with reports that, due to a corona-related shortage of box capacity, enquiry and later activity for conventional reefers saw an uptick. As an example, it was reported that twice as many conventional reefer ships from South Africa had been calling at Rotterdam than usual. The frequency of such visits through the South African citrus season increased from fortnightly to weekly.
Looking into the crystal ball, this peak will not continue forever. With vaccines becoming available, the world will pick up its normal pace, albeit with a little less wealth. What we learned from this crisis is that people will continue to eat whatever happens, that box carriers can actually control themselves when the crisis is big enough and that life goes on. Most likely, they will also fall back into old habits, ordering too many ships and continue to compete on prices. Also for the conventional reefer operators life will go back to normal. The ships remain old and continue to use a lot of fuel. And when oil prices go up again, their competitiveness goes down. Regardless, time will tell what happens and 2021 is likely to be a bit more normal than 2020.
For more information:
Rocio Castro Sevillano
Dynamar Shipping Information and Consultancy
Tel: +31 72 514 7414
Email: rcastro@dynamar.com
www.dynamar.com