Cold-chain demand has pushed box prices to their highest level since the first quarter (Q1) of 2017 when Drewry launched its Reefer Container Freight Rate Index.
According to a weighted average of reefer rates across the globe’s 15 busiest trade lanes, the index recorded a 26% general price increase in Q1 this year.
Moreover, the way rates have been tracked in recent times, showing no sign of curving down, supports Drewry’s view that reefer rates will continue on their upward trend through Q2.
Reefer shipping analyst Philip Gray says a seasonal uptick in cargo demand and rising bunker surcharges are the primary drivers of rising rates.
“Tight container equipment availability and a shortage of slot capacity have been key drivers in forcing up freight rates, as a recovering reefer trade has struggled to compete for space with higher-paying dry cargo traffic.”
Constrained availability of cold-chain boxes is also not helping.
Reefer production has reached record levels but container availability is expected to remain tight over the next few years, Gray says.
If it’s any consolation, dry-box freight is by far outstripping demand and rate increases in the reefer domain, Drewry says.
In addition, “container supply chain disruption has greatly increased demand for specialised reefer ships, driving time charter equivalents above the 100 cents/cft/30 days threshold, representing the strongest period of trading in a decade”.
Strong demand for specialised reefer ships, Drewry adds, is expected to see the world’s combined cold-chain fleet break through a 20-year decline, with more dedicated reefer vessels coming into service than any other time over the last two decades.
However, contraction is predicted for the near future with demand expected to taper off.
