Reefer market dynamics continue to change.
Drewry Maritime Research have just published their latest Reefer Shipping Market Annual Review and Forecast 2011/12, analysing the industries make-up including; leading operators’ profiles and fleets, perishable commodities, specialised reefer and freezer fleet capacity, containerised reefer vessels, ship economics and forecasts for the future. As the burgeoning containerised reefer market continues unabated, the specialist reefer fleet is feeling the strain. With twelve-month charter rates forecasted to continue sliding, scrapping levels gaining pace and for the first time an empty newbuild orderbook , the industry is changing quickly.
Twelve-month period charter rates continued to fall in 2011, having already lost 10% in 2010, with some positives being drawn from the spot market were overall year-end forecast rates are still on course to be higher than those in 2010. But with strong competition from containership operators, the financial outlook is a cautious one. Worldwide trade in perishable products continued to increase in 2010, with seaborne trade following suit, so demand for reefer capacity is still inherently strong. The mode of transport is the factor that continues to change the industry, with forecasts indicating that by 2014 some 74% of perishable reefer cargo will be carried by containerships – that will provide up to 95% of overall reefer capacity.
The continuing trend towards container usage leads Drewry onto important analyses of the current reefer fleet. For the first time the newbuild orderbook stands at zero, coupled with scrapping programmes that have seen, on average, 36 vessels a year scrapped between 2008-2010 and a further 19 added to the list as of June 2011, the fleet now stands at 691 vessels. If scrapping continues along recent trends it is feasible that the fleet could dwindle to 476 vessels by 2015. With all of these factors having significant effects on the specialised reefer industry it is foreseen that it will continue on its path as a niche carrier. Many trades are ideally suited to specialised reefer services and it is these that will ensure its continuing – and profitable- future, albeit on a smaller scale than in previous years.
Susan Oatway of Drewry Maritime Research stated, ‘Yes the specialised reefer fleet is contracting, but the containerised sector is by no means gifted an untroubled future. Containership operators have a dilemma on reefer pricing. On the one hand they will be keen to see constant – or increasing – utilisation levels of reefer slots. Given the high number of newbuildings scheduled to deliver, this suggests downward rate pressure. On the other hand, they will be keen to maintain pricing structures given both the impact this inevitably has on other cargoes, as well as their current financial concerns.’ as Reefer market dynamics continue to change
