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Reefer market overview Trans-Pacific Maritime Conference Philip Damas Director, Drewry Supply Chain Advisors Long Beach, March 5 th, 2013
© Drewry Drewry | Index Linked Container Contracts 1.Resilient demand despite economic problems 2.Import patterns have changed in the past decade 3.Decline in specialised reefer fleet 4.Expansion of container reefer capacity 5.Increase in containerised market share 6.The $1,500/reefer 40ft GRI of January Fewer options for shippers 8.Conclusions and Q&A Agenda
© Drewry Drewry | Index Linked Container Contracts 1. Resilient demand despite economic problems Worldwide seaborne trade of perishable reefer cargoes increased by 4% in 2011 (numbers for 2012 not available, yet): –Average historical of about 3% –Some commodity sectors growing faster –Not just a small market Source: Drewrys Reefer Shipping Market Review & Forecast 2012/2013 Drewry forecasts continued growth of 4.5% a year in next few years: –Will there be sufficient capacity? Growth in seaborne reefer volumes vs global GDP
© Drewry Drewry | Index Linked Container Contracts 2. Import patterns have changed in the past decade Source: Drewrys Reefer Shipping Market Review & Forecast 2012/2013 Distribution of global trade in perishables by import region in 2001 Distribution of global trade in perishables by import region in 2011
© Drewry Drewry | Index Linked Container Contracts 3. Decline in specialised reefer fleet Specialised reefer vessels being scrapped: –39 scrapped in 2011 –74 scrapped in 2012 Source: Drewrys Reefer Shipping Market Review & Forecast 2012/2013 Specialised reefer vessels age profile: –Ships are getting old –New ships delivered: zero! Age profile of specialised reefer fleet for 100,000+ cft (no of vessels)
© Drewry Drewry | Index Linked Container Contracts 3. Decline in specialised reefer fleet (continued) 10 years of decline for the specialised reefer fleet … progressively shrinking fleet Source: Drewrys Reefer Shipping Market Review & Forecast 2012/2013 The specialised reefer fleet (100,000+ cft) during
© Drewry Drewry | Index Linked Container Contracts 4. Expansion of container reefer capacity Global reefer container capacity is increasing: –Up 8% in 2011 –Estimated increase of 6% in 2012 Source: Drewrys Reefer Shipping Market Review & Forecast 2012/2013
© Drewry Drewry | Index Linked Container Contracts 5. Increase in containerised market share Containers are winning the battle Container reefer fleet: Up to 91% of world reefer capacity and growing Specialised reefer fleet: Down to 9% of world reefer capacity – supply reduced
© Drewry Drewry | Index Linked Container Contracts 6. The $1,500/reefer 40ft GRI of January 2013 Maersk Line Chief Executive Officer Soren Skou said Tuesday at a refrigerated logistics conference in Antwerp that his company plans to hike reefer rates by roughly 30% on a global basis from Jan 1, Drewry benchmarking of actual increase in reefer freight rates: –Varied considerably between routes, varied between carriers –Up to 33% increase between November 2011 and February 2013 Drewry reefer container freight rate benchmarks (Nov 2012=100)
© Drewry Drewry | Index Linked Container Contracts 7. Fewer options for shippers Specialised reefer ships are full Box carriers less willing/able to invest Capacity bottleneck, repeat of January 2013 GRI? but… Major reefer shippers have huge negotiating power over shipping lines
© Drewry Drewry | Index Linked Container Contracts 8. Conclusions Worldwide seaborne trade of perishable reefer cargoes is a growing market Import patterns have changed in the past decade Very fast decline in the specialised reefer fleet Expansion of the reefer containership fleet and box fleet Containers now dominate reefer shipping Impact of $1,500/FEU GRI What is to stop it happening again in future years?
© Drewry Drewry | Index Linked Container Contracts UK Office Drewry Christopher Street London EC2A 2BS,United Kingdom Telephone: +44 (0) India Office Drewry 209 Vipul Square, Sushant Lok-1 Gurgaon , India Telephone: /32 Singapore Office Drewry 5 Shenton Way #33-02, UIC Building, Singapore Telephone: / We are privately owned with research and advisory teams in London, Delhi, Singapore and Shanghai. Drewry was founded in 1970 as a provider of independent information and advice to the global maritime industry. Since then we have worked with over 4,000 clients in more than 100 countries. Shanghai, China Drewry 555, 5th floor Standard Chartered Tower 201 Shi Ji Avenue, Pudong District Tel: +86 (0) Thank you. Any questions? Philip Damas
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