Market Overview

ONE, OOCL Add Reefer Containers As Fresh Food Trade Set To Expand

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ONE, OOCL Add Reefer Containers As Fresh Food Trade Set To Expand

Ocean Network Express (ONE) and Orient Overseas Container Line (OOCL) plan to boost their refrigerated container capacity ahead of an uptick in seasonal demand for fresh food by year's end.

ONE, the container-shipping joint venture of Japan's three largest ocean carriers said it would add 6,000 40-foot, high-cube refrigerated containers to its reefer container fleet of 240,000 twenty-foot equivalent units (TEUs). 

ONE said 500 of the new containers will be equipped with atmosphere-control technology that will slow the ripening of fruits and vegetables. ONE also is working on advanced monitoring of refrigerated containers so shippers will be notified of temperature and humidity changes. 

The new reefer containers will be made available toward the end of the year "to meet reefer peak season global demand around the world."

The expansion comes after ONE added 14,000 new refrigerated containers in 2018. ONE said the new capital investment is "to meet growing demand for containerized reefer trade, which remains strongly augmented by expansion of the middle class in Asia constantly demanding healthy food choices."

Separately, OOCL said it recently purchased 4,500 refrigerated containers as part of a service offering that provides shippers visibility into reefer cargo. OOCL said the service would provide shippers with real-time visibility and estimated time of arrival for refrigerated containers.

According to the most recent United Nations trade data available, the value of fruit and nut imports into China rose 9% in 2017 to $6.4 billion. Vegetable and tuber imports rose 8% to $2 billion.  

Note: China data for 2018 is not available. Source: UN Comtrade

ONE's vessel-sharing partners in THE Alliance, Hapag-Lloyd (FSE: HLAG) also expanded its refrigerated fleet by some 11,000 containers in 2018, bringing its total reefer fleet to just around 204,000 TEUs.

The additional spending on reefer box capacity comes after several years of underinvestment by ocean carriers in the segment, according to maritime consultancy Drewry, leading to a chronically tight market for the specialized containers. 

It expects that refrigerated container capacity will grow around 4.5% annually over the next five years, a faster pace than overall containerized traffic. But Drewry said the refrigerated container capacity is still too low in certain trade lanes. 

"There remains ample supply of container ship reefer slot capacity on most trades, though certain routes with a high proportion of reefer cargo can experience tight space during seasonal peaks," Drewry said.

Drewry estimates that seaborne reefer cargo grew 3% in 2018 to 129 million tonnes, lower than the 4.4% gain seen in 2017 and the 3.5% average annual rate recorded over the prior 10-year period. 

It said a slowdown in shipments of meat and poultry, fish and seafood, bananas and live plant shipments were reasons behind the decline.

Image Sourced from Pixabay

Posted-In: container Freight Freightwaves reefer shippingNews Markets General

 

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