The latest issue of the 'Reefer Shipping Forecasting' by Drewry shows that the price of refrigerated shipping containers greatly increased this year, "but not nearly as much or as quick as the price of regular shipping containers." Drewry's Reefer Container Freight Rate Index shows an increase of 26% in the first quarter of this year. This is primarily because of increased demand and a rise in the fuel surcharge.
The price index keeps a weighted average of the prices in the 15 largest refrigerated shipping container companies. The price index is now in the highest position since the first quarter of 2017. And the price is expected to rise even further in the second quarter of 2021. However, according to Drewry, "compared to the price increase of regular shipping containers the price rise of refrigerated shipping containers is mild."
One of the researchers at Drewry said: "The shortage of shipping containers and the decline in shipping capacity both stimulated the price increase. Trade in refrigerated shipping containers is only just recovering, and it is therefore difficult to compete with regular shipping containers. Considering a record in the production of refrigerated products this year, Drewry expects the shortage in refrigerated shipping containers to continue for the next few years."
Drewry also emphasizes, at the same time, that interruptions in the supply chain of shipping containers push the demand for specialized refrigerated container ships. The regular fee for refrigerated shipping containers is around 1 USD per cubic foot per day. That is the strongest price in the last 10 years. According to Drewry: "Trade for these specialized ships has been extremely likely, so we expect the labor force to expand this year, breaking the sliding trend of the last 20 years. But this development may lose momentum after a while."
Drewry also pointed out that the shipping industry will have to deal with a larger volume of rotten fruit as the banana industry is suffering from the TR4 plant disease. Global shipping in bananas only increased by 1.8% in the fourth quarter of 2020. The Philippines, which is the second-largest banana exporter in the world, suffered from this plant disease in the last 12 months. Their export volume declined by 18%. More recently Peru reported cases of TR4. Neighboring Ecuador, the world's largest banana exporter, is on high alert.
Refrigerated shipping shrunk by 0.4% in 2020 to a total of 130 million tons. This year Drewry expects the refrigerated shipping industry to recover and grow by 2.7%. After that the industry will pick up speed and is estimated to expand at an average annual rate of 4%.
In the end the overall shipping volume slightly expanded this year, but the price of refrigerated shipping containers is still rising and there is still a disruption in the supply chain of shipping containers, which means the price is likely to remain high for the rest of the year.