Drewry: Container Lines Taking Lion’s Share of Seaborne Reefer Market

Container shipping lines are increasing their share of the seaborne reefer market and are forecast to accelerate their assault over the coming years, taking 85 percent by 2021, according to Drewry shipping consultancy.

Based on the forecast, the modal split between reefer containerships and specialized reefers would leave the later with only 15 pct share.

In 2016, the estimated perishable reefer cargo split was 79% in reefer containerships and 21% in specialized reefers.

“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 said.

The shipping consultancy estimates that by 2021, seaborne reefer cargo will exceed 134 million tonnes – increasing by an average of 2.8% per annum.

Despite future seaborne cargo growth levels being lower than those of the last decade (3.3%), such increases will have a significant effect on container lines with reefer capacity.

With almost 400 containerships with reefer capacity yet to be delivered, and possibly more still to be confirmed, Drewry pointed to the effect this will have not only on overall cargo tonnes carried, but also on capacity utilization.

“Based on the confirmed orderbook, 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,” Drewry added.

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, the consultancy pointed out.

Nevertheless, it currently provides around 5% of overall reefer capacity yet carries almost 21% of total seaborne perishable reefer cargo. Inevitably, although still carrying a disproportionate volume of cargo, both cargo tonnes and market share are set to fall for this mode.

“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”, said Drewry’s report editor Kevin Harding.

One area to watch is the potential lack of reefer container equipment.

“A lack of recent investment has already led to shortages in Europe and Brazil during the second quarter of this year, a situation that is 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,” the consultancy concluded.

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