November 3, 2021: Reefer container freight rates are likely to be higher through 2022, outpacing earlier estimates as well as expectations for dry container freight rates, according to Drewry, an independent maritime consultancy.
Reefer traffic is seen recovering from a flat 2020, Drewry said in its report Reefer Shipping Forecaster, and added that container vessel slots continue to remain scarce amid tight supply and continuing supply chain disruption.
“Booming reefer freight rates are following in the wake of the dry cargo sector as operators realign risk/revenue expectations for refrigerated cargo in line with more inflated system costs and operational challenges such as extended dwell times at transhipment ports and longer container equipment cycle times.”
Drewry’s Global Reefer Container Freight Rate Index, a weighted average of rates across the top 15 reefer intensive deep-sea trade routes, increased 48 percent over the year to 3Q21. The increase is expected to reach as much as 55 percent by the end of 4Q21.
"These advances have been mirrored by spot time charter rates for specialised reefer ships, which have seen their best ‘off season’ in history with rates for smaller vessels exceeding 100 cents cft/30 days."
Shippers of lower value cargoes like bananas, onions, citrus or frozen vegetables "are now confronted with much higher shipping costs after enjoying years of relatively low freight rates which helped them develop markets far afield. They must now work hard to ensure these higher costs are passed on to retailers and end consumers."
Seaborne reefer traffic is expected to increase over 3 percent in 2021 to reach 136 million tonnes, a little lower than previous estimates. "All commodities are showing growth in 2021 except bananas. Trade in meat to Asia is slowing amid lower pork prices in China and the banana trade is expected to decline 5 percent in 2021, owing to on-going disease of the Philippines crop and low banana prices in general."
Drewry is expecting tight market conditions to continue through 2022 "supporting both specialised reefer vessel employment and reefer container freight rates while challenging BCO logistics operations."