Prospects of reefer containers look good, some would even say recession-proof post-Covid
 Unless the Russo-Ukrainian War brews up into a World War holocaust, or destructive progressives in the West return the planet to extreme poverty from which it has recently escaped, then the life may well move into those broad sunlit uplands of widespread good fortune.
On a more mundane level, one can safely say that if the universe unfolded as it might, prospects look especially good for the reefer trade in international shipping, because as affluence spreads to more people, so does the demand for temperature-controlled shipping, studies show.
One such study comes from the Montreal-based WSP engineering consultancy: "The demand for plant-based and vitamin-rich diets in Europe and North America, combined with a booming Chinese meat market has led to an increase in the number of reefer containers transporters and ports," its study said.
If recessionary economic trends play out as they usually do, one might also predict that the bulk of affluent consumers, usually educated and health-conscious, will remain affluent and continue to demand the benefits of fresh-produce to support their healthy habits.
Looking back over the historic development of the international reefer trade, ones recalls first banana boats of the Harry Belafonte's day, in which his song Day-O tells the tale of a trucker impatiently waiting for the tally-man to tally his bananas so he could go home. Thus, these island-hopping banana boats became the first cruise ships, bringing mass tourism to the Caribbean.
As large outfits like the United Fruit Company engaged in the trade, these older shipping methods gave way to bulk reefer ships that tended to deal with single importers with large distribution centres and elaborate logistics arrangements.
But as time went on, the trade became balkanized, no longer captive of major fruit flows to major retailers. These were still around, of course, but tended to be restricted to major centres where a large local population could be served economically.
Enter the reefer container, with its increasingly sensitive internal sensors able to optimise conditions inside the box over extended time and distances. With the dispersal of affluent consumers to villages and towns outside ways and means were found to get upscale products and services to them with a starring role being performed by the reefer box with a growing assist from ecommerce.
Hence, Steve Wray and Christian Dalgaard of WSP’s Maritime Advisory team in London took the positive view that the reefer trade, which proved itself Covid resistant, and enjoyed similar results from the dawning of the work-from-home world.
"With seasonal foods becoming available all year round, consumer tastes and preferences have allowed growing regions to expand. Other food trends in terms of sustainable food supply - such as natural fish stocks complemented by agricultural intensification – will create more reefer trade going forward," said the WPS study, noting other growth factors.
"But other trends with an impact on maritime transport are also relevant. While greater near-shoring may be one outcome, the locations from which food and other products requiring refrigerators are exported or imported will not change significantly – hence the need for continued shipments," the study said.
Historically, refrigerated shipments have relied on relatively large consignments of frozen goods in a single bulk shipment, but this limits the markets that can be served. Conversion into smaller packages, such as individual 40-foot reefer containers, avoids this and makes it easier to serve larger areas in greater detail.
According to recent work by a major terminal operating company that added a new facility to its portfolio, shrimp exports from Ecuador have increased from 92,000 tons in 2005 to 645,000 tons (pre-Covid in 2019) and were destined for a number of different destinations including China, Europe, the US and Vietnam.
WSP found that the logistics supply chain process has improved significantly. For example, reefer units can be delivered directly to the shrimp farm and the cargo loaded directly into a refrigerated container at the required temperature.
Construction of a refrigerated warehouse, which is part of the project assessment, clearly shows how the options available to shippers in the port have improved. These trends are typical of those occurring across the industry and are expected to continue, said the WSP study.
It avoids shrimp being delivered by truck to a refrigerated vessel and the cargo being open to the elements for some time while being transported to the vessel. Refrigerated containers avoid these problems, provided that all infrastructures are available.
Commitment to investing in “cold chain logistics” and the increased use of the Internet of Things (IoT) by shipping companies, such as Maersk Line, will further transform and improve refrigeration operations. There is already an increase in visibility and cost of rising energy bills, through efficiencies such as real-time access to data on container temperature that can help shippers and cargo owners to organise their reefer shipments more effectively.
Thus, the future looks bright for reefer containers. Evidence that reefer is recession proof, customer tastes that integrate healthier and sustainable food demand, along with gains in efficiency through the development of new reefer technology and the flexibility offered by reefer containers all point to a loss in market share for traditional bulk reefer shipping.
Traditionally, reefer freight has focused on perishable goods. These must be packaged in temperature-controlled conditions to ensure their freshness. With the development of reefer container technology, the reefer freight market offers opportunities for flexibility and growth.
There are several reasons for this trend, which WSP has recently experienced when supporting a maritime advisory service for a major client in Peru and another in Ecuador.
Given this experience, and the fact that areas in which reefer cargo is produced are limited to parts of the world where living is easier and less expensive than in northern climes, the expanding role for the 40-foot refrigerated box and the continued affluence of its core customer base looks assured - even recession proof. |
