Steady reefer growth

   In August, Hapag-Lloyd announced it had placed its largest order ever for refrigerated containers—6,000 units, in fact.
   The company said the order will enable it to “benefit from increasing transport volumes not just on east-west trades, but also on north-south and Latin American trades,” and follows its order in April for five10,500-TEU ships that will each have 2,100 slots for reefer containers.
   Hapag-Lloyd, which last year acquired the Chilean container carrier CSAV, said the new ships will be used primarily on trades to and from South America.
   The German liner company is not the only container carrier that’s benefiting from growth in refrigerated cargoes.
   Drewry, in its latest Reefer Shipping Market Annual Review & Forecast, said worldwide perishable reefer trade moving by all modes of transportation increased by 1.8 percent in 2014—reaching almost 190 million tons. It added the amount of perishable refrigerated cargo moving by sea was up 4.9 percent and exceeded 100 million tons globally in 2014 for the first time. The fish and seafood trade “had an exceptional year in 2014.”
   “The growth in reefer cargo is impressive not only because it has occurred consistently throughout the last decade, but also because it has done so despite a global economic downturn, severe weather conditions in many growing areas as well as port and terminal strikes and other industrial actions,” said the London-based consultants. “Regardless, it seems the perishable reefer industry is able to withstand all of this.”
   Container carriers continue to grow at the expense of operators of breakbulk reefer ships. Over 75 percent of perishable reefer seaborne trade was shipped by reefer containership services in 2014, up from around 65 percent in 2010. Drewry expects by 2019 reefer containership services will carry more than 23 million tons more cargo than they did in 2014.
   “With the exception of the citrus trades, all perishable reefer cargoes saw trade growth in 2014,” Drewry said, adding there was “a significant decrease in the citrus trade over the last three years between the U.S. and Japan.”
   The U.S. Department of Agriculture’s Foreign Agricultural Service reported in the July edition of its Citrus: World Markets and Trade report that U.S. production of fresh oranges is estimated in the 2014-2015 harvest and market year (due to end roughly in late October) to reach 5.8 million tons, short 350,000 tons from the prior year and down 2.3 million tons from 2010-11.
   Overall, Florida accounts for about two-thirds and California nearly one-third of U.S. citrus production. Both states face challenges, however. California suffers from continued severe drought conditions and, in both states, there’s a problem with so-called “citrus greening.”
   U.S. exports of oranges are estimated in 2014-2015 to be 540,000 tons, up from 500,000 tons in 2013-2014, but below the 750,000 tons in 2010-2011.
   There will be “nearly flat production in California while consumption is down on overall reduced availability of fruit,” USDA said in its report.
   A USDA website explains that citrus greening, also known as Huanglongbing (HLB) or “yellow dragon disease,” is one of the most serious citrus plant diseases in the world and gets its name because infected trees produce misshapen fruit.
   The disease moves from plant to plant by an insect called the Asian citrus psyllid, a tiny mottled brown insect about the size of an aphid.
   USDA said citrus greening disease has now killed millions of citrus plants across the southeastern United States and is now threatening to spread across the country.

This column was published in the October 2015 issue of American Shipper.