Reefer containers set to pay their way under pool plan

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The possible formation of a grey pool for reefer containers moved a step closer this week with the publication of a new white paper on the concept and signs that resistance to its introduction is lessening.

Steve Alaerts, general manager of perishable-specialist freight forwarder foodcareplus, told The Coolstar that after an initial meeting in Antwerp earlier this year between representatives of the various stakeholders in the perishable maritime supply chain – shippers, forwarders, carriers, leasing companies and reefer manufacturers – there was an increasing consensus that a pool of reefer equipment owned by a neutral body could increase the efficiency of reefer operations and lead to hugely reduced costs.

“The reaction to the project is very promising and it appears that those who were most opposed to the concept, which was the shipping lines, are now beginning to understand the potential benefits. There is a change in their appreciation of how it could work and where the benefits lie.”

The concept of a grey pool is hardly revolutionary. The model under consideration is similar to the chassis pool developed by TRAC Intermodal in North America, where the company operates a 230,000-strong chassis fleet owned by a variety of interests, including shipping lines and lessors. A dry container grey pool concept was also previously reported by sister publication The Loadstar. Mr Alaerts argued, however, that the idea of having an independent pool manager would represent a step change in the way that shipping lines in particular, approach the reefer business.

“Carriers need to throw away the idea that they have to own the reefer containers. They do not. They ought to be concentrating on operating the vessels. It is not essential for them to own the boxes and in fact there are several ways that having access to a pool would prove beneficial for them as well as for shippers,” he said.

Currently, the average reefer box makes four round trips per year, a utilisation level that Mr Alaerts described as ridiculous. The price of a new reefer container is in the US$18-20,000 range, while the average lifetime of a reefer box is nine and a half years (although that is currently being stretched by most reefer container carriers), so over the course of its lifetime the average reefer may make around 35 trips, representing a fixed investment to the carrier of over US$500 per trip.

“That figure is clearly ridiculously high. Carriers say that they do not get a proper return on investment on reefer boxes, but that is not because they cost too much. It is because they do not operate them efficiently. If a reefer pool could help a reefer container make just six trips a year rather than four then that would represent a huge cost difference,” he said.

Mr Alaerts also noted that creating a pool would give carriers access to a much greater range of equipment, and would lead to higher levels of customer service. Given the highly imbalanced nature of the trade lanes which many reefers traverse, one of shippers’ greatest challenges is obtaining enough reefers to carry their cargo. Many carriers suffer from being unable to deliver empty reefers to shippers when and where they are needed, a situation that he said drives their customers into the arms of their competitors.

He also argued that giving greater access to the equipment for parties such as forwarders and depots would encourage more cargo on backhaul routes, as forwarders would look to fill available capacity.

“Carriers very often do not know where the cargo is destined inland. They simply release the container at the terminal and wait for the box to return to the port. There simply is not the dialogue that there could be.”

Mr Alaerts will present further research at next week’s Cool Logistics Africa conference in Cape Town, including a virtual application that has been developed and a possible trade lane example.

The white paper, Neutral reefer asset management: a logical solution to a chronic industry challenge? is published by foodcareplus and Seacube Container Leasing and can be downloaded here.