Reefer fleet is dwindling, says Drewry

As the burgeoning containerised reefer market continues unabated, the specialist reefer fleet is feeling the strain, says Drewry. 12-month charter rates are forecasted to continue sliding, scrapping levels gain pace and for the first time the newbuild orderbook is empty.

With forecast rates still on course to be higher than in 2010, countered by strong competition, the financial outlook is a cautious one. Worldwide trade in perishable products continued to increase in 2010, with seaborne trade following suit, so demand for reefer capacity is still inherently strong. The mode of transport is the factor that continues to change the industry, with forecasts indicating that by 2014 some 74% of perishable reefer cargo will be carried by containerships – that will provide up to 95% of overall reefer capacity.

For the first time the reefer newbuild orderbook stands at zero, coupled with scrapping programmes that have seen, on average, 36 vessels a year scrapped between 2008-2010 and a further 19 added to the list as of June 2011, the fleet now stands at 691 vessels. If scrapping continues along recent trends it is feasible that the fleet could dwindle to 476 vessels by 2015.

Susan Oatway of Drewry Maritime Research stated, “The specialised reefer fleet is contracting, but the containerised sector is by no means gifted an untroubled future. Containership operators have a dilemma on reefer pricing. On the one hand they will be keen to see constant – or increasing – utilisation levels of reefer slots. Given the high number of newbuildings scheduled to deliver, this suggests downward rate pressure. On the other hand, they will be keen to maintain pricing structures given both the impact this inevitably has on other cargoes, as well as their current financial concerns.”