If all is well in the world, then all is well for reefer cargo that sees solid growth ahead
 Unless the Russo-Ukrainian War brews up into a World War, or Western progressivism reduces the planet to the poverty-stricken state from which we have so recently escaped, then the life of the world should move into those "broad, sunlit uplands" of Winston Churchill's imagination.
In more mundane terms of international shipping, one can safely say that if the universe unfolds as it should, there should be good times ahead for the reefer trade, studies show. And if reefers are trending upwards then so is global affluence, say experts.
To this end a Montreal-based WSP engineering consultancy study concluded: "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."
If recessional economic trends play out as they usually do, the bulk of affluent consumers, which usually include those educated to the health benefits of fresh-produce will mostly remain affluent enough to support such healthy habits in the medium to long-term.
Looking at the origins of the international reefer trade, ones goes back to Harry Belafonte's Calypso Banana Boat song "Day-O" of the 1950s. It's a tale of a Jamaican trucker impatiently waiting for the tally-man to tally his bananas so he can go home. He was also probably loading the first of the cruise ships that hopped about the Caribbean islands giving tourists a chance to visit the ports which had become tourist attractions.
Then came economies of scale. They were now applied to the cargo side as large outfits like the United Fruit Company modernised the trade. Older banana boat methods gave way to bulk reefer ships that tended to deal with single importers with large distribution networks.
But then the trade balkanised from there. Retailers were no longer captive of major fruit flows and mega suppliers. They were still around, of course, even to a dominant degree, but tended to be restricted to major centres where a large local populations could be served economically.
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 problem and makes it easier to serve larger areas.
Enter the reefer container, with its increasingly sensitive sensors able to optimise conditions inside the box over extended periods and distances. With the dispersal of affluent consumers to villages and towns outside, means were found to get upscale products and services to them with the starring role being performed by the reefer box.
Hence Steve Wray and Christian Dalgaard of WSP’s Maritime Advisory team in London were able to give a positive view of the reefer trade's future, which recently proved itself to be Covid resistant, and as a result immune to the dawning of the work-from-home phenomenon in the working world, whose impact and implications have yet to be fully felt.
"With seasonal foods becoming available all year round, consumer tastes and preferences have allowed growing regions to expand," said the WPS study. "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.
"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.
But other trends with an impact on maritime transport are also relevant, they say. While greater near-shoring may be one outcome of the Covid scare, the locations from which food and other products requiring refrigerators are exported or imported will not change significantly – hence the need for continued shipments.
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 has found that the logistics supply chain process has much improved. 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.
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 this, provided that all infrastructure is available.
The commitment to investment 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, which can help shippers and cargo owners to organise their reefer shipments more effectively.
The future looks bright for reefer containers. Evidence shows that reefer is pandemic and recession proof. Customer tastes that integrate healthier food, 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 reefer bulk shipping, but gains for the reefer box. |
