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Container shipping lines are increasingly targeting reefer cargo because of its stability, low barriers to entry and its potential for further market growth.

“Shipping lines have been targeting the reefer sector because of its growth and because of its economies of scale,” said Nigel Webster, director refrigerated containers for container lessor Seaco.

He added: “Reefers tend to be a higher margin business as there’s more value-add you can bring to the product offering and to customers. Shifting trade directions are also a factor.”

Speaking at yesterday’s Cool Logistics Asia conference in Hong Kong, Mr Webster told delegates that as the reefer market expands and shifts towards Asia, container lessors can provide a valuable service by plugging the gap between the actual funding that cash-strapped carriers have for new asset investments and the market need for more reefer boxes.

Container leasing is attractive to carriers because it allows them to reserve capital via off-balance sheet investments and reduce risk exposure.

Keen to make a point about the importance of container lessors in providing reefers to the market, Mr Webster explained that although Maersk Line is the biggest owner of reefer containers worldwide, the next four largest owners are leasing companies. Hamburg Sud is the second biggest shipping line owner but fifth overall.

“There’s 2.5m teu of reefer containers worldwide with a total value of US$22bn. The leasing companies own around 42% of those containers.

“Container leasing companies are providing the assets for the cold chain. In fact, without us you could argue you couldn’t have a cold chain,” he said.

In comparison to dry box shipping, Mr Webster explained that rather than the consolidation occurring through carrier alliances on major trade lanes, container reefer shipping remains “de-consolidated” in that there are lots of small carriers and NVOCCs, especially in Asia, making it easier for carriers to enter new trades and compete.

The reefer market is also attractive because of the large percentage of perishables transported and the stability that food as a globally traded commodity offers trade managers.

“Although freight rates have been volatile, and you could say lease rates have been volatile too, the underlying cargo demand means the stability is there. Reefer cargo means food and food always moves,” said Mr Webster.

At the same time shipping lines need to improve their utilisation of reefer boxes, Lars Kastrup, senior vice president at CMA CGM argued.

CMA CGM carried 821,000 teu of reefers last year, or almost 16,000 teu per week. However, Mr Kastrup said that number was a result of only filling each reefer container with reefer cargo less than five times per year on average, and that in theory the carrier could use 20% of its total fleet capacity as reefers based on the number of plugs available.

“We don’t do it but technically it would be possible. It’s a huge opportunity for further growth,” said Mr Kastrup.

“So this is one of the challenges we have, not just us at CMA CGM but the whole industry – we don’t use our equipment well enough.

“Of course, when you’re doing a short trip you’re doing much better, but once you take a container from Asia all the way to East Coast South America, plus if you take an empty and you have to get it back again to Asia, that’s quite a long trip. So the utilisation of reefers is not good enough and we need to become better,” he said.


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