Although refrigerated containers only represent a small, but key, part of the total movement in shipping containers, what happens in the overall shipping market is of crucial importance and might well have a significant knock-on effect on the fresh produce industry.
Rates for refrigerated containers have traditionally been far more stable than that of “dry van” containers, however we have never seen such volatility in shipping rates as we have witnessed over the last few years. Rate swings of over 100 per cent from one quarter to another have not been uncommon.
The first knock-on effect is, of course, in the overall profitability and therefore viability of the shipping lines themselves - the same companies that are also running reefer container ships.
Cumulatively, the container lines lost over $6 billion in 2011; $2bn in the last quarter alone. And, despite the many recent rate increases, many of the lines are expecting to lose money again this year. In fact, Maersk Line, the world’s largest shipping line, has just announced that it lost almost $600 million in Q1 2012; more than it lost in the whole of last year. And that was on revenue up seven per cent to $6.3bn!
This is all very sobering and, although we wouldn’t for a minute doubt the long-term viability of Maersk itself - which has stated that it expects an overall “negative up to neutral result in 2012” - the omens are potentially more ominous for some of the smaller players.
What this means for the fresh produce importers and exporters is that they are increasingly under pressure to ensure that their logistics chains are working at optimum safety and efficiency levels. It’s imperative that in order to avoid “contagion”, the fresh produce industry does its utmost to ensure that its logistics chains are being well managed.
On a more positive note, the latest schedule reliability figures for the major container shipping lines increased markedly last month, according to research just published which covers almost 10,000 arrivals worldwide.
Of particular concern for the fresh produce industry, overall reliability, measured as a vessel making its destination within one day of schedule, jumped from 78 per cent to 81 per cent last month.
All of these issues surrounding reliability and even the long-term sustainability of the shipping industry are making it all the more important that fresh produce shippers work with a high-quality freight-forwarding partner; one that can advise them knowledgably and help them successfully and profitably navigate through the instability of the global shipping industry. -
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