Report Sees Container Ships Dominating Perishables Market
Created by HButler on 9/13/2011 3:00:45 PM
Container ships will transport three quarters of perishable reefer cargo by 2014 as they take further market share from specialized refrigerated vessels, according to a new report.
The rise of containerized reefer shipping is depressing charter rates for refrigerated ships, which are facing a “cautious” financial outlook, the report by Drewry Maritime Research stated.
“With 12-month charter rates forecast to continue sliding, scrapping levels gaining pace and for the first time an empty new build order book, the industry is changing fast,” according to the London’s firm’s annual reefer shipping review.
Reefer rates fell 10 percent in 2010 and are still retreating, although world trade in perishable products is increasing and demand for reefer capacity is “still healthy.”
Container ships are forecast to carry some 74 percent of perishable reefer cargo by 2014, when they will provide up to 95 percent of capacity.
An average 36 ships a year have been scrapped between 2008 and 2010, and 19 have been demolished in the first six months of 2011, cutting the fleet to 691 ships. If current scrapping rates continue, the fleet will shrink to 476 vessels by 2015. For the first time the new build order book stands at zero, Drewry said.
But specialized reefer ships still have a future as niche carriers, the analyst said.
“Many trades are ideally suited to specialized reefer services and it is these that will ensure [their] continuing — and profitable future — albeit on a smaller scale than in previous years,” said Drewry’s Susan Oatway.
Containerized reefer operators face a dilemma on pricing, according to Oatway.
“On the one hand they will be keen to see constant – or increasing – utilization levels of reefer slots. Given the high number of newbuildings scheduled to deliver, this suggests downward rate pressure.”
“On the other hand, they will be keen to maintain pricing structures given both the impact this inevitably has on other cargoes as well as their current financial concerns.”
- Bruce Barnard, The Journal of Commerce.
The rise of containerized reefer shipping is depressing charter rates for refrigerated ships, which are facing a “cautious” financial outlook, the report by Drewry Maritime Research stated.
“With 12-month charter rates forecast to continue sliding, scrapping levels gaining pace and for the first time an empty new build order book, the industry is changing fast,” according to the London’s firm’s annual reefer shipping review.
Reefer rates fell 10 percent in 2010 and are still retreating, although world trade in perishable products is increasing and demand for reefer capacity is “still healthy.”
Container ships are forecast to carry some 74 percent of perishable reefer cargo by 2014, when they will provide up to 95 percent of capacity.
An average 36 ships a year have been scrapped between 2008 and 2010, and 19 have been demolished in the first six months of 2011, cutting the fleet to 691 ships. If current scrapping rates continue, the fleet will shrink to 476 vessels by 2015. For the first time the new build order book stands at zero, Drewry said.
But specialized reefer ships still have a future as niche carriers, the analyst said.
“Many trades are ideally suited to specialized reefer services and it is these that will ensure [their] continuing — and profitable future — albeit on a smaller scale than in previous years,” said Drewry’s Susan Oatway.
Containerized reefer operators face a dilemma on pricing, according to Oatway.
“On the one hand they will be keen to see constant – or increasing – utilization levels of reefer slots. Given the high number of newbuildings scheduled to deliver, this suggests downward rate pressure.”
“On the other hand, they will be keen to maintain pricing structures given both the impact this inevitably has on other cargoes as well as their current financial concerns.”
- Bruce Barnard, The Journal of Commerce.
