What's happening in Europe

 

Europe Trade Specialists 

 

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Born again Panama Canal presents reefer opportunities with
a European focus

 


RAPID development of containerships with reefer plugs has been so pronounced that the expansion of the Panama Canal now heralds a new era of deploying economies of scale to ship vast quantities of perishables to the right place at the right price.

And that's Europe.

With the increase in European consumption of these goods, the reefer trade is expected to grow exponentially in the coming years, writes Argelis Moreno De Ducreux, the Panama Canal Authority's vice president for planning and development.

Europe is key, she writes in Fort Lauderdale's Maritime Executive. The Panama Canal expansion will bring new opportunities to this market segment, offering the capacity necessary to respond to this growth, which will boost the trade in refrigerated products.

In fact, the average vessel capacity from the west coast of South America to Europe is 3,510 TEU, making this route the highest container reefer capacity and the most important for the movement of perishable goods with an average of 20 per cent reefer plugs on board.

Transport development and new technologies are also impacting the trade of perishable goods in refrigerated containers.

Today, the main trade through the Panama Canal consists of containerised cargo loaded on container vessels, but in recent years, there has been a transition from conventional reefer cargo vessels to container vessels. This trend will continue with the addition of new services through the Panama Canal that will better serve the refrigerated cargo market and its trade route.

The Panama Canal expansion will bring new opportunities to this market segment, offering the capacity necessary to respond to this growth, which will boost the trade in refrigerated products.

Recent trends suggest that the supply chain will shift from container vessels to more versatile reefer containers. Containerships on the other hand will only be required to offer reefer plugs, because the technology change has made in the container itself, contrary to the conventional reefer fleet where the investment in technology has to be made for the entire cargo compartments. This flexibility of containerships allows liner services to carry all types of refrigerated commodities.

According to Drewry, from a capacity perspective, the existing global containership fleet provides 1.8 million reefer TEU. That's 93.9 per cent of the world's reefer ship capacity.

>From the demand perspective, in 2014, the worldwide perishable trade was 189.5 million tons and 55 per cent was seaborne; 75.4 per cent of total seaborne reefer cargo was transported in reefer containers and that is expected to increase to 82.3 per cent or 19.4 million tons by 2019, being meat, poultry, fish, seafood and bananas, the main traded commodities.

These investments indicate the high demand shippers are experiencing for transporting refrigerated commodities.

With the Panama Canal expansion, the temperature-controlled logistics industry will benefit from neopanamax container vessels that will move twice, or even triple, the amount of cargo possible today.

Currently, growing demand and use of reefer boxes is facilitated by continued technological advancements in the cold-chain industry, all of which has led to substantial shifts in the transshipment options available to shippers. Containership operators now offer technologies that extend the life of goods and slow down the ripening of products.

For instance, new reefer containers can control temperatures within plus or minus of 0.25 of a degree Celsius with a 65 per cent reduction in energy consumption compared to earlier technologies. These containers are also able to control carbon dioxide to slow ripening and remove ethylene produced by fruits and vegetables that might otherwise deteriorate surrounding products.

More importantly, refrigerated container vessels are able to preserve the cold chain during the entire shipment cycle. Due to minimal handling, reefer containers maintain the same temperatures from the producer to consumer, guaranteeing the extended life of a product.

The strong transition into reefer containerships is already evident today.

In fiscal year 2015, nearly 18 per cent of the total TEU moved through the canal were reefers. To date in this fiscal year, 13.1 million long tons of reefer cargo has been transported through the waterway and containerships made up 74.6 per cent of this cargo. Currently, there are eight liner services via Panama Canal that serve this trade route.

However, with the opening of the expanded canal, carriers have shown new interest in moving from panamax to neopanamax containerships vessels of about 6,500 TEU.

Merging actual services could be an option to handle this cargo in bigger vessels. Carriers and shippers are likely to take advantage of the cost reductions and the advantages of containerised reefer cargo provided by the use of larger ships.  

The highly anticipated expansion of the Panama Canal will increase the maximum TEU capacity of reefer vessels and help Panama increase its exports of perishable goods.

The Panama Canal will continue to invest in new shipment options and adapt to changing trade patterns for years to come. The Panama Canal expansion will bring new opportunities to this market segment, offering the capacity necessary to respond to this growth, in turn boosting the trade of refrigerated products.


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Europe via the expanded Panama Canal? Is the author's
expectation overblown, or does it heralds the beginning of a
major development in world trade?
 

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