Drewry: Container carriers grabbing larger share of reefer market

The trend toward major lines capturing a bigger slice of the refrigerated (reefer) market is predicted to accelerate in the coming years, according to the latest edition of Drewry’s Reefer Shipping Market Review and Forecast 2017/18, published Sept. 26.    A larger and larger share of the seaborne refrigerated (reefer) cargo market has been captured by container shipping lines in recent times, and that trend is predicted to accelerate in the coming years, according to a new forecast by British shipping consultancy Drewry.
   In 2016, the estimated perishable reefer cargo split was 79 percent in reefer containerships and 21 percent in specialized reefers, the report shows. But by 2021, the modal split will be closer to 85 percent and 15 percent in reefer containerships and specialized reefers, respectively, Drewry predicts in the latest edition of the firm’s Reefer Shipping Market Review and Forecast 2017/18, published Sept. 26.
   “The reefer sector continues to report strong cargo growth, which is very encouraging for vessel operators. However, the transition from the specialized operators to the reefer containership operators is gaining momentum,” report editor Kevin Harding explained.
   “The resilience of the industry to adverse economic, commercial and even climatic conditions has been demonstrated once again as seaborne perishable reefer trade increased in 2016 and is forecast to grow further still in 2017,” Drewry stated. “By 2021, seaborne reefer cargo will exceed 134 million tons – increasing by an average of 2.8 percent per annum (from 2016).”
   The projected seaborne cargo growth levels are lower than the 3.3 percent average over the last decade, but Drewry indicated that such increases should have a significant effect on container lines with reefer capacity.
   Based on the confirmed orderbook, including almost 400 containerships with reefer capacity yet to be delivered, and maybe more still pending confirmation, Drewry looked at the effect this is expected to have not only on overall cargo tons carried, but also on capacity utilization.
   “Despite significant increases in reefer (container) capacity, reefer utilization will remain broadly stable as a result of the increased seaborne cargo volumes and rising market share for the reefer containership mode,” the London-based firm projects. “On the other hand, with a reducing specialized reefer fleet, not only will this mode see its cargo volumes decrease, but also its market share will reduce year-on-year.”
   However, according to data, the mode currently provides around 5 percent of overall reefer capacity, yet carries almost 21 percent of total seaborne perishable reefer cargo.
   “Inevitably, although still carrying a disproportionate volume of cargo, both cargo tons and market share are set to fall for this mode,” Drewry said.
   An area to watch, according to the firm, is a potential lack of reefer container equipment, because a recent lack of investment led to shortages in Europe and Brazil during the second quarter of this year, a situation that’s likely to repeat itself.
   Although carrier consolidation may result in an improvement in container utilization and efficiency, the lack of container equipment orders placed in 2017 is a concern, Drewry said.