Reefer trades bounce back

In-Depth

A recovery in reefer container volumes in Q1 is expected to continue throughout the rest of 2024, with Southeast Asia and India being target markets for the Chilean cherry industry.

“Following a difficult year for reefer shipping in 2023, Q1 2024 saw a revival in growth as the global economy sidestepped potential threats and further supply chain disruptions,” said analysts Drewry. They also noted that a return to growth for the largest commodity groups – meat, bananas and fresh vegetables – would help drive the sector this year, as two years of decline provided a low baseline for growth in 2024.

The Drewry report forecast that container carriers would transport an estimated 123mt of reefer cargo this year and account for 88% of the market, up from 87.5% in 2022 and 87% in 2020. This trend will continue, with the London-based maritime research and advisory company expecting reefer containers to account for 90% of the total seaborne trade in reefer cargoes in 2028 (see Table).

Part of this growth will be driven by the continuing success of the maritime sector, particularly liner shipping companies and reefer containers, in attracting perishable cargoes away from air freight services and in regional trades, especially in Europe, from trucking companies.

In February, WEC Lines phased 50 x 45ft high-cube pallet-wide reefer containers into its equipment pool, and commenced a new service linking Agadir (Morocco), which is an important port serving the country’s citrus fruit industry, and Portugal, Spain and the UK.

The equipment offers customers a similar loading capacity to highway trailers with the new service designed to compete with logistics companies and truckers offering overland services via Spain and France to the UK. WEC has said the investment reflects demand from its customers and its objective to offer its customers “comprehensive and sustainable transport solutions”.

The new containers feature electric-powered reefer machines that are capable of maintaining temperatures in the range of -30ºC to +30ºC. According to Caesar Luikenaar, managing director of WEC Lines, they also use a refrigerant with a low GWP (Global Warming Potential – 631), thought to be R513a, and insulation foam that has a zero Ozone Depletion Potential (ODP).

Integrated services

Increasingly, the larger ocean carriers, such as Maersk, MSC, CMA CGM, Hapag-Lloyd and Ocean Network Express (ONE), are focused on providing totally integrated logistics solutions to exporters, importers, traders and/or growers of specific products and/or commodity groupings. The thinking is that by understanding and developing tailor-made cold chain solutions, greater volumes and longer shipping contracts can be secured.

Maersk’s corporate freight transport integrator strategy means that it has moved fastest in this direction. It has been backed by significant investments in equipment and infrastructure, including in new cold stores. Recently, Maersk opened a new cold store in Puerto Montt, Chile, and put in place a number of initiatives aimed at improving its capabilities in the country’s highly important salmon and aquaculture industries.

“This strategic investment reinforces our commitment to enhancing local infrastructure and capabilities, ensuring seamless operations and optimal storage conditions for Chilean aquaculture products,” explained Juan Eduardo Ritz, head of cold chain storage in Latin America for Maersk.

He added: “Within our cold store product in the area, we have set two key objectives. Firstly, we aim to meet the growing demands of our customers. To achieve this, we are working diligently to double our storage capacity and improve our response times to cargo requests. Secondly, we are focused on enhancing the sustainability of our service by obtaining LEED certifications and adapting our chambers to Maersk’s global standards. With these efforts, we not only seek to meet our customers’ expectations but also actively contribute to a more sustainable and responsible future.”

Maersk is keen to help its customers in the fish industry optimise their cold chains and transform the way the cargo is transported. “In the salmon industry, we have been actively engaged for many years, and in recent years, with much greater intensity and relevance,” stressed Johan Bacigalupo, Head of Integrated Sales, Protein and Dairy for the West Coast of South America at Maersk. “We are actively striving to bring our organisation’s integrative vision to an industry that requires it, due to its current level of connectivity. We can support the entire supply chain, from the factory where an export or sale begins, to a customer’s cold storage facility or even to the home of an individual consumer.”

Chilean cherries

Similarly, Maersk is hoping to help Chile’s cherry exporters become more competitive and assist the industry as a whole to expand its sales markets in Asia. Currently, exports are mainly channelled into China for its Lunar new year celebrations with over 400,000t shipped this past season, according to the Chilean Cherry Fruit Committee.

Southeast Asia and India are target markets for the Chilean cherry industry, but in the case of India, longer transit times are an issue when it comes to maintaining the quality of the fruit while the volume of cargo needed to schedule viable direct call services is not available.

Maersk has teamed up with the University of Chile and Geofrut, which is one of the country’s leading exporters of cherries, to carry out research and publish a detailed report on how the cold chain for cherries might be improved and structured in a more sustainable way.

In conjunction with the university’s Post-Harvest Studies Centre and with the support of Daniel Guerrero, Maersk’s cold chain specialist for Latin America, the use of controlled atmosphere technologies (CA) was investigated. In particular, the study focused on the use of CA as a means of extending the shelf life of cherries without impacting the quality of the fruit.

Staying fresh

Specific trials commenced in December 2023, with Maersk using CA and macro-perforated bags supplied by Tres Castillos to allow for the proper management of oxygen, carbon dioxide and humidity.

“The advantage of this method is the visibility of the gas process during the transport,” explained Guerrero. “The combination of Tres Castillos bags with our StarCare containers provides full visibility through the Captain Peter technology, ensuring total control over unit performance and cherry care. This synergy enables precise control of the storage and transportation environment, guaranteeing the freshness and quality of cherries at each stage of the logistics process, thus facilitating reaching more distant destinations.”

The trial involved a container being shipped to the port of Nansha, Guangdong province, in southern China where Marston Marine & Cargo Surveying (H.K.) Limited then inspected and analysed the fruit.

“Based on the results of our inspection and available information, and analysing the actual condition of the fresh cherries, notwithstanding the foregoing, we opine that it can be observed that, after excluding differential factors as much as possible, in the case of cherries subjected to different conditions of transport gas control, the quality of the merchandise in the controlled atmosphere container N°MCAU6061287/40´RF was significantly superior to that of the standard refrigerated container N°MNBU4336424/40´RF and the unique flavour or aromas of the merchandise were also better preserved,” the company said in a statement.

A standard reefer container in this case involves the use of modified atmosphere bags into which the cherries are packed and these, in principle, extend the freshness of the fruit for up to 30 days from the point of harvesting. “However, this method lacks visibility into gas management, leaving producers, exporters and recipients unaware of the transportation process, which limits transit time and complicates gas supervision,” said Guerrero.

Backing CA

He added: “We can conclude that this detailed study has demonstrated the excellent potential of controlled atmosphere technology in the transportation of cherries, highlighting its ability to prolong the freshness and quality of the fruit during maritime transit. The results reflect the superiority of cherries transported in a controlled atmosphere compared with conventional methods. This innovation offers tangible benefits in terms of product quality and represents an opportunity to develop sustainable logistics solutions.”

Elsewhere, Singapore-headquartered Ocean Network Express (ONE) has been working closely with Daikin on a number of projects, including using its Active CA system to move highly perishable cut flowers. ONE believes significant opportunities exist in using the solution to convert customers from using more expensive air freighting services.

Telematics opportunities

In addition to the many operational, logistical, cargo care and environmental reasons behind beneficial cargo owners’ decisions to shift to using reefer containers are the ongoing advances in technological, innovative telematics and digital solutions that shipping lines and leasing companies are introducing into their fleets.

These are helping to reshape cold chains by allowing more time-sensitive and high-value cargoes, such as cut flowers and certain bio-science products, to be transported in good condition over longer periods of time and greater distances. They also allow for real-time monitoring of conditions inside the container which is extremely important for the pharmaceutical industry.

ONE’s cooperation with Daikin is a case in point. The Daikin Active CA system is unique. It does not use membrane technology to inject dry nitrogen into the container. Instead, a rich nitrogen gas is injected into the container which quickly reduces the respiration of the cargo by reducing the oxygen content.

It also creates positive pressure inside the container, which prevents outside air entering. A bespoke control logic system continually monitors and fine-tunes both temperature and atmospheric conditions inside the container. Daikin claims the solution is effective on both short-haul and long-haul voyages.

The extended use of Artificial Intelligence (AI) will lead to further changes as it will enable businesses to use the data from existing telematics and data logging devices to make faster and smarter decisions. Currently an estimated 75% of reefer containers are monitored remotely and that figure is expected to rise to around 87% over the next five years.

The global seaborne trade in perishable (reefer) products will increase by 1.6% in 2024 to 139mt and by 15.2% to 157.5mt in 2028. The container shipping sector of this trade will transport an estimated 123mt (5.8m FEU) in 2024, compared with 120.3mt (5.7m FEU) in 2023, and this is forecast to increase to 142.4mt (6.8m FEU) over the next five years.

These are some of the key numbers from Drewry’s latest Reefer Shipping Forecaster report, published in April. The growth rates are up on the previous forecast of three months ago and follow a much stronger than envisaged increase in traffic volumes in Q1 2024 when an estimated 34.7mt of reefer cargo was shipped.

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