A surge in the scrapping of container tonnage is expected this year as a consequence of the introduction of the new fuel sulphur regulations according to the tenth edition of Dynamar’s Annual Reefer Analysis.
Comparatively few vessels have fitted scrubbers and so the carriers in the container sector will be required to switch to the more expensive low sulphur fuel oil (LSFO) and according to Dynamar’s analysis this will put add pressure on carriers who will struggle to take on the extra costs.
Seaborne trade of perishable products grew 3% in 2018 to 119 million tonnes and has increased every year since 2009, yet conventional carriers’ woes are set to continue whilst the containerisation of major cargoes moves ahead.
Supply side dynamics have set the tone throughout the year and the focus on the fleets will likely remain well into 2020 following the entry into force of the IMO 2020 fuel regulations and the expected surge in scrapping.
Dynamar expects last year to be the calm before the storm. Trade tensions, continued containerisation and reduced rates remain the topics of conversation, but a shakeup is surely on its way. The IMO 2020 regulations came into force on 1 January this year and the immediate concern for carriers remains the cost implications.
The worldwide trade in perishable cargoes continues to grow, but it is not all plain sailing. The latest figures show that the international perishables trade reached a record 163 million tons in 2018 with 119 million tons carried by sea. Yet trade tensions continue to cause concern amongst shippers and carriers, both containerised and conventional, and the slowing output in key economies has led to an erratic end to the year in terms of trade flows.
With demand for fresh produce remaining resolute, the focus is on the fleets, the fortunes and the futures of the conventional and containerised carriers. Major market movers, including global fruit traders Chiquita and Del Monte, continue to transfer their trade to boxes. Specialised conventional carriers, including this year’s market leaders Baltic Shipping and Seatrade, are being forced to focus on an increasingly tight number of trades and are likely to fall victim the coming volatility on the back of IMO 2020. The conventional fleet’s high average age, combined with fuel hungry engines, has primed the conventional sector for a surge in scrapping due to rates remaining low and higher costs on the horizon.
On the whole, container carriers are expected to fare better. Increased fuel costs and the fitting of scrubbers has made cost recovery the main aim, but the greater fuel efficiency and the capture of conventional cargoes makes for a more optimistic outlook. A further fall in the market share of the conventional carriers is on the cards.
There are a number of concerns for carriers as the calendar turns over into the new year, will the conventional sector witness a surge in scrapping as a result of IMO2020? Will smaller conventional carriers still have solid business in the meat and fish sectors? Can specialised reefer services continue to compete with the major shipping lines?
“While we are coming to the end of what has been a quiet year, a few important questions will be asked of both conventional and container carriers over the coming months. There are limits to the costs carriers can pass onto their customers and so we may see some exit the market, especially on the conventional side. Containerships are expected to manage better although only time will tell. Overall, 2020 is likely to be an interesting year”, according to Dynamar’s report.
Dynamar (2019) REEFER Analysis – Market Structure, Conventional, Containers
(Author: Frans Waals), is Dynamar’s latest report on worldwide perishable shipping using conventional reefer vessels or refrigerated containers on box ships.
It uses the most recent trade statistics on reefer commodity data by country and area, supplemented with up-to-date port, vessel, box and carrier fleet statistics and gives a profound insight into the background, characteristics, goings and present status of the worldwide perishables shipping market and its most relevant players. The 241-page report contains 237 tables and 79 figures.
Features include:
Reefer market structure(s)
- The world perishable trades: volumes by main produce and export regions;
- Transport modes and characteristics: transport conditions – modern techniques;
- The world’s main import regions: United States, European Union, Russia, China and Japan;
- Trading patterns: conventional ships versus container vessels – main export areas – exports by product and individual country;
- Major reefer ports: perishable exports by country – description of relevant reefer handling facilities by mode of transportation – port throughput statistics.
Conventional reefer shipping
- Extensive conventional reefer ship overviews and statistics (existing IMO-registered fleet, orderbook, age profile, demolition, future development);
- Structured profiles of the world’s 15 largest conventional reefer ship operators, including markets/trade lanes served and their operated fleet (whether owned or chartered).
Container reefer shipping
- Extensive overviews and statistics on the composition and development of the container vessel fleet and orderbook, reefer TEU capacity, plugs/capacity ratios by size category;
- Refrigerated container box fleet, size categories, production data, capacity by carrier;
- Structured profiles of the world’s 10 largest reefer container carriers.
The Dynamar REEFER Analysis applies the most recent trade statistics (up to 2018) on reefer commodities by country and area, supplemented with up-to-date port, vessel, box and carrier fleet statistics and gives a profound insight into the background, characteristics, developments and present status of the worldwide shipping market of perishables and the relevant players.
This has all been complemented with data from Dynamar’s own resources. This includes an unrivalled databank containing corporate, operational and financial information on some 16,000 different companies in the marine industry and DynaLiners, our daily, weekly and monthly digest, analysis and commentary on the industry’s comings and goings, and of course the knowledge, experience and reports of our R&A, Constant Monitoring, Consultancy, Marine Intelligence and Shipping Publications teams.
Table:
Effective July 1, 2019, 566 conventional reefer ships larger than 100,000 cft were in service, with a combined capacity of 180.5 million cft. The vessels have an approximate total container capacity of 50,820 TEU.
An overview of the top 10 conventional reefer operators (per cft operated):
| Rank | Operator | Operated fleet | ||
| Ships | cft | Share | ||
| 1 | Baltic Reefers | 34 | 20,569,701 | 11.4% |
| 2 | Seatrade | 26 | 14,184,000 | 7.9% |
| 3 | GreenSea | 45 | 13,522,351 | 7.5% |
| 4 | Frigoship | 31 | 10,769,000 | 6.0% |
| 5 | Network Shipping | 13 | 6,054,500 | 3.4% |
| 6 | Star Reefers | 10 | 5,786,000 | 3.2% |
| 7 | Fresh Carriers | 9 | 4,651,300 | 2.6% |
| 8 | Africa Express | 7 | 4,108,600 | 2.3% |
| 9 | Maestro Reefers | 6 | 4,078,600 | 2.3% |
| 10 | Boyang | 13 | 3,189,600 | 1.8% |
| Top-10 | 194 | 86,913,700 | 48.1% | |
| Other operators | 372 | 93,625,300 | 51.9% | |
| Grand Total | 566 | 180,539,000 | 100% | |
| Share Top-10 | 34% | – | – | |
Note: Capacity has been allocated to the carrier actually responsible for the long-term commercial operation of the ships
Dynamar’s tenth annual specialised Reefer Analysis, which is based on the most reliable and complete refrigerated trade statistics and provides complete coverage of trade lanes, major reefer ports, operators and fleets. The trade data, which have been drawn from four international organisations, have been meticulously checked and consolidated into a comprehensive overview of the five main reefer cargo categories: dairy, fishery products, fruit, meat and vegetables.
DYNAMAR (2019) Reefer Analysis: Market Structures, Conventional, Containers is immediately available and can be ordered for direct download under the link www.dynamar.com/publications/210 or by contacting Dynamar B.V.
