0.8 C
Hamburg
Tuesday, February 11, 2025
Home Most Popular Reefer container freight rates to outpace dry box pricing

Reefer container freight rates to outpace dry box pricing

Reefer container freight rates across global trades rose over 50% in the year to the second quarter of 2022, matching gains made in dry cargo pricing, and are estimated to increase further in the third quarter, outpacing dry box rates, according to British consultancy Drewry.

However, Drewry reports that some stabilisation is already underway on some reefer trades and this is expected to be followed by modest declines through 2023, as cargo owners push back on unsustainable freight rate increases.

Drewry’s Global Reefer Container Freight Rate Index, a weighted average of rates across the top 15 reefer intensive trade routes, rose 50.4% YoY in the second and third quarters of the year reading is expected to climb further, though the pace of growth will slow.

However, the British consultants say that East-West routes have seen only modest freight rate increases over the last four quarters, as capacity pressure has eased thanks to the softening pork trade from both Europe and North America to Asia.

The exception has been the westbound Transatlantic which saw volume jump as much as 9% in the year to the second quarter, while average freight rates doubled over the same period, as the early opening of the North American economy boosted consumption in the hotel, catering and entertainment sectors.

Looking ahead, reefer container freight rates are expected to soften in the next year, but to a much lesser extent than dry box pricing, as reefer rates continue to lag that of the wider trade.

Drewry Global Reefer Container Freight Rate Index

Drewry Global Reefer Container Freight Rate Index

Global seaborne reefer traffic recovered by 2% in 2021 from a pandemic ravaged 2020, reaching 137.4 million tonnes, but slowed to 1.1% YoY in the first half of the year. Drewry forecasts that the trade will end the year with an annual gain of just 1%.

“The reefer supply chain is at a precarious moment with extremely high input costs for materials such as fertilizer, packaging and energy, to name just a few. Freight rates remain unsustainably high and many beneficial cargo owners, particularly those moving low value products, are shipping less as they are priced out of the market”, said Drewry’s head of reefer shipping research, Philip Gray, who went on to point out, “The next round of freight rate negotiations between carriers and cargo owners are expected to take heed of this reality, leading to a modest decline in reefer freight rate levels through 2023.”

Drewry expects seaborne reefer trade growth to accelerate over the coming years, to expand at an average annual rate of 3% over the years to 2026. Modal shift will continue to be a key feature, according to Drewry, with the containerised portion forecast to grow at the faster pace of 3.7% compound annual growth rate, as the specialised reefer ship fleet continues to age inexorably with very few units on the orderbook.

“Despite fears of a global slowdown in trade, supply chain disruption is expected to remain a feature well into 2023,” noted Gray.

He added that “As BCOs have learned to their cost, the reefer trade is secondary to the much larger and dominant dry freight trade which drives carrier network priorities. This reaffirms the need for cargo owners to take more control of their logistics to ensure timely delivery and optimal product integrity.”





Latest Posts

Africa advances green shipping strategy

African nations have outlined concrete steps to advance the green transition in shipping, with a focus on maritime governance, infrastructure development, and job creation. On...

Lebanon’s Maritime Sector: Navigating Challenges and Opportunities

Lebanon's maritime sector, a vital economic bridge between East and West, stands at a critical crossroads. Over the past three months, Lebanon's shipping activity has...

Gemini to launch US-Colombia service

Gemini Cooperation, the new alliance between Maersk and Hapag-Lloyd, has announced a new service update, building on the FLS shuttle service between North and...

Yara and NYK sign ammonia-fueled medium gas carrier charter deal

Yara Clean Ammonia Switzerland SA, a subsidiary of Yara International ASA, one of the world’s largest ammonia distributors, has signed a time-charter contract with...

Maersk announces Mombasa port delays

Maersk has published a customer advisory regarding its proactive actions about the ongoing challenges at the Port of Mombasa in Kenya. In recent weeks, the...
error: Content is protected !!