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Fruit season drives up reefer market

Charter rates for refrigerated freighters in the Atlantic have risen by around 20% since the beginning of the year. Container traffic is also doing well in South America and South Africa.

Shipping is a dominant theme at the world’s leading trade fair for the fruit trade, Fruit Logistica in Berlin. After an easing in the course of last year, capacities in reefer shipping as well as in the reefer container sector are currently becoming tight again.

The season for fruit and vegetables in the southern hemisphere is said to have got off to a strong start and pushed freight rates up noticeably. This can be seen most clearly in the spot charter market for specialized reefer vessels in the Atlantic.

According to broker reports, rates for larger freighters (over 500,000 cubic feet/11,500 tdw) have risen by around 20% to up to 125 US cents per cubic foot (charter term 30 days) since the beginning of the year. This is around twice as much as four months ago.

“The market level is developing well. It’s not booming like in coronavirus times, but it’s healthy,” says Glenn Selling, Chief Operations Officer (COO) of the leading reefer shipping company Cool Carriers with around 40 ships.

The start of the season in South America with cherries, grapes and berries from Chile and Peru was very good. The citrus harvest in Morocco, which is important for reefer shipping, also exceeded expectations. “Above all, shipments to the USA are picking up. Significantly more large ships are needed,” says Selling.

Hernán Martínez, Senior Director for Reefer and other Specialty Segments at Hapag-Lloyd
Hernán Martínez, Senior Director for Reefer and other Specialty Segments at Hapag-Lloyd (© Thies Raetzke)

Business for Cool Carriers and its competitors is currently shifting more towards South Africa, where the grape season is now underway, and soon to New Zealand with the new kiwi harvest.

These are exciting times for Cool Carriers because the fleet will be undergoing major renewal over the next few years. The Cyprus-based shipping company is expecting a total of eleven newbuilds – three of them this year, the others by 2028. “And that’s not the end of the story. We are already in talks about further projects with shipyards in Japan.”

Players in container shipping are also satisfied with the development of the reefer business. Freight rates for seasonal business in South America have risen “considerably”, says Hernán Martínez, Senior Director for Reefer and other special segments at Hapag-Lloyd.

For the large product categories such as bananas and pineapples, which are shipped all year round under long-term contracts, rates are stable at the previous year’s level. “All in all, we have had a good start.” According to Martínez, Hapag-Lloyd has set itself high growth targets in the reefer container business this year.

On the one hand, the carrier wants to use its increased space allocations as part of the Gemini alliance to grow in trades “where we were previously underrepresented.” Martínez cites transpacific traffic between the Far East and North America as an example. In addition, further special services for fruit and other perishable goods are to be launched on smaller routes.

Since December, Hapag-Lloyd has been operating a temporary service for grapes ex South Africa. The shipping company also intends to revive the seasonal service for citrus fruit from South Africa (“Citrus Connect”), which was launched for the first time last year, in a few months’ time. (mph)

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