Drewry Sets Up Club to Make Reefer Freight Rates More Transparent

Illustration; Image Courtesy: Siem Shipping

Shipping consultancy Drewry has launched a new Reefer Benchmarking Club to meet the growing concerns of shippers about rising freight rates and reduced service levels at a time of carrier consolidation.

As informed, the club will operate as a closed user group with “full anonymity and confidentiality.” Club members will receive detailed reports that benchmark different elements of their ocean spend and carrier service performance. This is expected to enable club members to reduce their ocean spend and improve competitiveness, according to Drewry.

The relevance of this new initiative is highlighted by recent increases in reefer freight rates, illustrating that reefer shippers are suffering more than others. Reefer shippers are particularly sensitive to shipment delays or service disruptions because of the perishability of their cargo, Drewry said.

Furthermore, a decade of cost cutting among shipping lines has led to equipment shortages caused by underinvestment in new reefer equipment and their decision to stop repositioning empties to certain demand areas that are in deficit, the shipping consultancy explained.

“The recent wave of carrier consolidation will continue into 2018 and its effect on the supply side of the market will be felt ever more strongly for several years to come,” Stijn Rubens, Senior Consultant at Drewry Supply Chain Advisors, commented.

“At the same time, demand is expected to continue growing at a healthy pace. That is why, at Drewry, we are coming to the view that in tomorrow’s market the balance of power between shippers and carriers may shift,” Rubens added.

“In such a context, two key questions that every supply chain professionals should be asking themselves are – am I paying too much for my reefer container shipments and how do my reefer container rates compare to my competition,” he stressed.

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