Global refrigerated container (reefer) rates are expected to increase further in the third quarter, according to shipping sector analysts Drewry.
This comes after reefer container freight rates across the top 15 reefer-intensive trade routes rose just over 50 percent in the year to the end of June.
- Reefer: Refrigerated container
- teu: 20-foot equivalent unit used to measure container sizes
- feu: 40-foot equivalent unit used to measure container sizes
- Blank sailing: This could mean a vessel is skipping one port, or that the entire string is canceled.
- Panamax vessel: The maximum size of a ship that can transit the Panama Canal, ranging in length between 200 and 250 meters (650 and 820 feet) wth capacities of 50,000 to 80,000 dry weight tonnage.
However there is stabilization on some reefer trade routes, which may be followed by modest declines through 2023 as cargo owners push back on unsustainable freight rate increases, Drewry said in its recently published Reefer Shipping Annual Review and Forecast 2022/23 report.
East-West shipping routes have seen only modest freight rate increases over the last four quarters, as pressure on capacity has eased.
One exception has been the westbound Transatlantic route, which saw volume rises as much as 9 percent in the year ended June 30.
Average freight rates doubled over the same period, helped by a revival of foodservice and entertainment businesses in the North American market.
Global seaborne reefer traffic recovered by 2 percent in 2021 after plummeting in 2020, the first year of the pandemic, to reach 137.4 million metric tons.
Trade should end this year with an annual gain of just 1 percent, Drewry forecasts.
Drewry’s head of reefer shipping research Philip Gray said freight rates remain unsustainably high and many beneficial cargo owners, particularly those moving low value products, are shipping less as they are priced out of the market, he added.
The coming round of freight rate negotiations between carriers and cargo owners are expected to take this into account, sparking a modest decline in reefer freight rate levels through 2023.
Despite the present uncertainty, Drewry expects seaborne reefer trade growth to grow at 3 percent a year until 2026, while supply chain disruption is expected to remain a feature well into 2023.
"This reaffirms the need for cargo owners to take more control of their logistics to ensure timely delivery and optimal product integrity," Drewry wrote in the report.
Container rates more than quadrupled following the onset of the global COVID-19 pandemic, rising particularly steeply in 2021, but are still far above those seen before the health crisis began.
Following the onset of the pandemic in early 2020, the seafood and many other industries have suffered from soaring shipping rates and reduced shipping options, battling for space aboard vessels.
The crisis began in early 2020 when containers became stranded where they were not needed due to congestion at ports sparked by COVID checks combined with spikes in demand for commodities and consumer goods, shipped particularly from China.