Reefer container rates increased by a quarter in the first quarter

Reefer container shipping rates have risen sharply this year but are still outpaced by the inexorable rise in dry box prices, according to maritime research consultancy Drewry.

Refrigerated Containers

The Drewry Refrigerated Container Freight Rate Index, a weighted average of reefer rates on the top 15 intensive reefer trade routes, increased 26% in the first quarter, due to a seasonal increase in demand for cargo and increased fuel surcharges.

This was its highest level since the Index was launched in 2017 and rates are expected to rise further during the second quarter.

However, these increases are modest compared to the continued increase in dry freight rates, as illustrated in the table below.

Dry cargo traffic

“Low availability of container equipment and tight slot capacity have been key factors in forcing up freight rates as a recovering reefer trade has struggled to compete for space with better dry cargo traffic. paid," said Drewry's head of refrigerated transport research Philip Gray.

“Despite record reefer container production levels in 1Q21, Drewry expects equipment availability to remain tight for years to come.”

Meanwhile, the interruption of the container supply chain has greatly increased the demand for specialized refrigerated ships, which equates to a drive time above the threshold of 100 cents / cft / 30 days, which represents the period strongest trade in a decade. In fact, the trade in these vessels is so dynamic that Drewry expects the fleet to expand this year, breaking a 20-year downward streak, although the contraction is expected to continue thereafter.

Market recovery

Meanwhile, the recovery in the trade in perishable products transported by sea is expected to be tempered this year by the Fusarium TR4 disease that affects banana production. Worldwide shipments increased just 1.8% in 4Q20 and growth has slowed further since then.

Over the past 12 months, the Philippines, the second-largest banana exporter, has been notably affected by disease, with exports contracting by as much as 18% in 2020. More recently, Peru has reported an outbreak of Fusarium, which has caused a state of maximum alert not only in Peru itself but also in neighboring Ecuador, the world's largest banana exporter.

After contracting 0,4% to 130 million tonnes in 2020, Drewry expects the recovery of sea-cooled traffic to be capped at 2,7% this year, before accelerating thereafter to an average annual growth rate. 4%.

Positivism of the area

The decrease in the size of the fleet of specialized refrigerated vessels will cause the traffic of perishable goods in containers to expand at a faster rate in the medium term, at a rate comparable with the dry cargo trade.

“Despite modest cargo growth this year, reefer container shipping rates are advancing further during the sector's peak season and are expected to remain high for much of the year, supported by continued disruption in the chain. container supply. The same drivers will continue to drive charter rates for specialized vessels, ”Gray concluded.

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