In an interview with WorldCargo News, Mike Knowles, shipping manager for Zespri, described how reefer vessels will continue to be an important part of the kiwifruit export supply chain in the future.
Zespri is New Zealand’s sole kiwifruit exporter, and the last two years have been a turbulent period for the company as it grapples with the declining fleet of reefer ships. In 2017, Seatrade, one of the long-established players in the NZ fruit trades, introduced the first of its new Colour class container vessels. These were 2,259 TEU ships with 674 reefer plugs, and Seatrade started using these in place of reefer vessels on its Meridian services to Europe.
However, after just one year, Seatrade withdrew from the market. CMA CGM stepped in to upgrade the former Meridian service to a weekly service, utilising Seatrade’s vessels and some of the container equipment it previously controlled.
Zespri has continued to expand its use of reefer containers, but it has also made a significant commitment to new reefer vessels. Both are needed to meet demand. At over 550,000t of fruit, this season’s kiwifruit export crop will likely be smaller than the record levels seen last season. Last year, Zespri chartered 45 reefer vessel sailings and filled over 18,000 40ft reefer containers, whereas this season it expects to use fewer than 18,000 containers. Around 60% of exports are now containerised.
In hold and on deck
Knowles said Zespri relied on reefer container services for exports to Northern Europe and the US East Coast. It continued to use reefer ships for its markets in South Korea, Japan and Southern Europe.
Zespri’s main objective is to get the fruit to market as quickly as possible, and it prefers to use a direct service to its main markets of Shanghai, Taiwan and Japan. When it comes to container services, with CMA CGM, Zespri can get a “reasonably fast” 32 days service to Northern Europe that meets its requirements, but the Mediterranean markets are not so well served. The way lines organise container services, said Knowles, requires a double transhipment to reach Mediterranean markets from NZ, which adds time and increases the risk of delays. With reefer vessels, on the other hand, Zespri can get fruit into the Southern Mediterranean in 27 days, and it gets better “outturns”, which refers to the quality of the fruit when it arrives at destination.
Earlier this year, Tokyo-based Fresh Carriers announced that it had signed contracts for three new reefer vessels that will service the NZ kiwifruit industry for the next 20-25 years. Knowles said Zespri is providing cargo guarantees to underwrite that investment and secure a transport option for that period.
The vessels will be deployed in the NZ to Japan, South Korea and China trades. They are mixed vessels with the capacity for 4,880 pallets below deck and 100 x 40ft reefers on deck. One 40ft high cube reefer holds around 200 pallets of kiwifruit. The vessels will have their own cranes, which opens up possibilities to load kiwifruit at other regional ports in NZ, including Gisborne, where a cool store has just been built.
The vessels will be built in Japan by Kitanihon Shipbuilding Co, with the first scheduled to be delivered in October 2020, the second in December 2020, and third in April 2021.
Availability and reliability
While exporters in South America have had problems with reefer equipment availability over the last two years, Zespri has not suffered that experience. Positioning reefers into NZ is a significant expense, as around 70% come in empty, and some of the balance are shipped as non-operating reefers with dry cargo. The key to availability, said Knowles, is accurate forecasting, and Zespri prides itself on being able to deliver accurate season forecasts to carriers, with data that is updated weekly.
With regard to reefer reliability and performance, Knowles said Zespri is generally getting good equipment from carriers. It specifies reefer boxes that are no more than eight years old, and it does not require a remote reefer monitoring service. Zespri itself puts temperature logging devices inside containers to audit temperature performance, but, as it ships 18,000 reefers per season, Knowles said that what Zespri really wants to know from carriers is not the temperature of all the individual containers in real time, but to be alerted when there are exceptions that it needs to manage and plan for.
If there is an area where Zespri would like to see a technical improvement, it is in the air flow around the last pallets inside the container at the door end. There is not always consistency throughout the whole container, with the pallets at the door receiving less air circulation, which affects out-turn quality. Reefer machinery OEMs are promoting controlled atmosphere (CA) systems as being able to improve performance in this regard, but Knowles said Zespri is not looking in that direction. It has tried CA but did not see any real benefit in fruit quality at out-turn.
What concerns Zespri more than equipment is carrier service levels, and Knowles said delays and congestion can be major problems. Zespri has encountered cases where a line has added another port call to a service, and Zespri’s cargo then missed its transhipment connection, which is unacceptable with perishable exports. Like other shippers, Zespri is concerned about the impact that industry consolidation might have in reducing its options when it comes to services and schedules. Reefer vessels are another way to keep options open in this regard.