Global reefer container freight rates expected to beat dry container prices in 3Q22

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Reefer container freight rates in global trade have increased by more than 50% in the year to the second quarter of 2022, matching gains in dry cargo pricing, and are expected to increase further in the third quarter of 2022, topping dry box rates, according to a recent report from maritime research consultancy Drewry.

But some stabilization is already underway on some reefer trades, and this should be followed by slight declines through 2023 as freight owners fend off unsustainable increases in freight rates, according to the “Reefer Shipping Annual Review and Forecast 2022/23 Report”.

Reefer container freight rates in global trade have increased by more than 50% in the year to the second quarter of 2022, matching gains in dry cargo pricing, and are expected to increase further in the third quarter of 2022, exceeding dry box tariffs. But some stabilization is already underway on some reefers, according to a report by Drewry.

Drewry’s Global Refrigerated Container Freight Rate Index, a weighted average of rates across the top 15 reefer-intensive trade routes, rose 50.4% year-on-year in the second quarter of 2022 and the reading of the Q3 2022 is expected to climb further, although the pace of growth is slowing. However, East-West routes have seen only modest increases in freight rates over the past four quarters as pressure on capacity eased thanks to slower pork trade from Europe and the United States. North America to Asia.

The exception was the westbound transatlantic which saw its volume jump up to 9% in the year to the second quarter of 2022, while average freight rates doubled in the same period, as the early opening of the North American economy stimulated consumption in the hotel. , catering and leisure.

Going forward, 2023 reefer container freight rates are expected to decline, but to a much lesser extent than dry box prices, as reefer container rates continue to underperform broader trade.

Global maritime reefer traffic recovered 2% in 2021 after a pandemic ravaged 2020, reaching 137.4 million tonnes, but slowed to 1.1% year-on-year in the first half of 2022. Drewry forecasts that the trade will end the year with an annual gain of just 1 percent.

“The reefer supply chain is at a precarious time with extremely high input costs for materials such as fertilizers, packaging and energy, to name a few. Freight rates remain too high and many BCOs, especially those carrying low value products, are shipping less because their price is out of the market,” said Philip Gray, Refrigerated Shipping Research Manager at Drewry in a press release. “The next round of freight rate negotiations between carriers and freight owners should take this reality into account, leading to a slight decline in reefer freight rate levels through 2023.”

Despite the current uncertainty, Drewry expects the growth of refrigerated shipping trade to accelerate over the next few years, at an average annual rate of 3% over the years to 2026. Modal shift will continue to grow. be a key feature with the containerized portion expected to grow at the fastest pace of 3.7% CAGR (compound annual growth rate), as the specialist reefer fleet continues to age inexorably with very few units in the backlog.

“Despite fears of a global slowdown in trade, supply chain disruption is expected to remain a feature through 2023,” Gray added. “As BCOs have learned the hard way, the reefer trade is secondary to the much larger and more dominant dry cargo trade that dictates the priorities of the carrier network. This reaffirms the need for freight owners to better control their logistics to ensure timely delivery and optimal product integrity.

The Refrigerated Shipping Annual Review and Forecast Report 2022/23 is an annual report that provides in-depth analysis and forecast of the Perishable Refrigerated Shipping Market, covering major commodity flows, capacity development of the fleet for the two main vessel modes, as well as detailed market information. analysis by individual trade route, including the evolution of freight rates.

Fibre2Fashion News Office (NB)

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