Reefer container freight rates to outpace dry box pricing

Aug, 17, 2022 Posted by Gabriel Malheiros

Week 202233

Reefer container freight rates across global trades rose over 50% in the year to the second quarter of 2022, matching gains made in dry cargo pricing, and are estimated to increase further in the third quarter, outpacing dry box rates according to British consultancy Drewry.

However, Drewry reports that some stabilization is already underway on some reefer trades, and this is expected to be followed by modest declines through 2023 as cargo owners push back on unsustainable freight rate increases.

Drewry’s Global Reefer Container Freight Rate Index, a weighted average of rates across the top 15 reefer-intensive trade routes, rose 50.4% YoY in the second and third quarters of the year reading is expected to climb further, though the pace of growth will slow.

However, the British consultants say that East-West routes have seen only modest freight rate increases over the last four quarters, as capacity pressure has eased thanks to the softening pork trade from both Europe and North America to Asia.

The exception has been the westbound Transatlantic which saw volume jump as much as 9% in the year to the second quarter, while average freight rates doubled over the same period, as the early opening of the North American economy boosted consumption in the hotel, catering and entertainment sectors.

Looking ahead, reefer container freight rates are expected to soften in the next year, but to a much lesser extent than dry box pricing, as reefer rates continue to lag that of the wider trade.

Global seaborne reefer traffic recovered by 2% in 2021 from a pandemic ravaged 2020, reaching 137.4 million tonnes, but slowed to 1.1% YoY in the first half of the year. Drewry forecasts that the trade will end the year with an annual gain of just 1%.

Drewry expects seaborne reefer trade growth to accelerate over the coming years, to expand at an average annual rate of 3% over the years to 2026. The modal shift will continue to be a key feature, according to Drewry, with the containerized portion forecast to grow at the faster pace of 3.7% compound annual growth rate as the specialized reefer ship fleet continues to age inexorably with very few units on the order book.

Source: Container-News

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