do you know that all reefer-ships will become scrap?
some solution about this?
we have an idea to solve this matter, but not easy to become reality.
do you?
THIS NEW FROM HellenicShippingNews.com
Reefer Shipping Hits Rocky Shores as Rates Tumble in 2016
The seaborne transport of fresh produce in both conventional reefer ships and refrigerated boxes is estimated to have reached 108.5 million tons in 2016. This equals some 16,900 laden conventional reefer ships of 500,000-cu.ft average, or 3.65 million filled 40’ High Cube reefer containers. The maritime transport of fresh produce grew faster than the overall world seaborne trade of dry cargoes of all kinds. Hence, the fresh share increased to, a nonetheless still modest, just over 4%.
In calmer conventional waters?
The conventional reefer sector went through difficult years, but compared to containers it seems to have arrived into calmer waters, that is to say, if it comes to mergers and takeovers. Actually, there were just three of those, all of them less spectacular than the likes of previous years:
– Eimskip acquired Nor Lines – including one conventional reefer ship
– Samskip took full control of Silver Green – 7 small conventional reefers (fish)
– Fruit trader GF Group is to merge with ditto Glenata Food – no ships involved
If considering rates, however, the conventional reefer seas were extremely rough, again. Annual average 2016 Time Charter Equivalents (TCE) for the 270,000 cft benchmark were the lowest since 2010; at 39 dollar cents for 450,000 cft vessels, they were even the worst ever in 10 years time!
Container sector contrast and similarity
The largely absence of conventional reefer M&A activities stands in stark contrast with the container sector. Here, the 2016 consolidation engine was running at full speed. Including one sad failure, potentially eight traditional names have been/will be sent into history. Invariably they all concern east-west operators, but yet, the larger entities’ refrigerated box fleet and their onboard plugs make them (more) substantial reefer trade players:
- China Shipping into Coscon (Feb) – reefer TEU 88,000 – plugs 136,000
- APL by CMA CGM (Jun) – reefer TEU 293,000 – plugs 258,000
- Hanjin, sadly going under (in Sep) operated: – reefer TEU 35,000 – plugs 55,000
- UASC into Hapag-Lloyd (1Q2017) – reefer TEU 205,000 – plugs 146,000
- “K” Line, MOL, NYK joint venture (Sep 2017) – reefer TEU 211,000 – plugs 129,000
- Maersk Line taking Hamburg Süd (late 2017) – reefer TEU 677,000 – plugs 462,000
Cost reduction in the form of larger, less fuel consuming, more efficient ships has been the container segment’s answer to ever falling rates. Generally, box operators are very proficient market readers, but this time less so and things got out of hand. Too many too large ships were ordered, which in combination with a stumbling market induced a bitter rate war.
Chasing for anything that could serve as a cost contribution, no cargo was holy. Refrigerated cargoes not either and during 2016, also due to a weakening reefer trade environment, at time rates fell to USD 700 per 40’, Perhaps better than the revenue of a dry box, but a 40’ reefer costs some USD 16,000 to build, more than 6 times the price of a standard box. Moreover, carrying a reefer incurs additional fuel (costs) to provide the correct temperature and ventilation to the cargo: at sea, on the quay and overland. How much cost recovery would a USD 700 revenue be?
Russian perishable imports by origin
A reefer ship orderbook? It exists!
By the end of 2016, the reefer ship-orderbook counted a relatively healthy sixteen units, with their capacities ranging between 120,000 and 650,000 cft. Most, if not all of the smaller, up to 350,000 cft, units will be for the fisheries trades, including four on order by Seatrade. Just four vessels are of the largest sizes and assumed all to be for Star Reefer. The Anglo-Norwegian company itself has so far confirmed only two of them of which the first delivered in very early days of 2017.
A continuously shrinking vessel armada
With the average age rising and an overall restricted newbuilding activity, the conventional reefer ship fleet continues its decline, although now slowed somewhat by the current orderbook and the four ships delivered in 2016. Yet, by 2025, ships built before 1995 will reach the average scrapping age of 30, altogether causing the fleet to fall by around 35% to some 400 units.
… and a slower growing box fleet
Completely against the trends of previous years, at an estimated 135,000 TEU, the 2016 production of reefer boxes halved as compared to the year earlier. It may be considered a reflection of the signalled weakening reefer trade environment with the single advantage of a lack of equipment shortage.
Top 10 conventional reefership operators
Note: Capacity has been allocated to the carrier actually responsible for the long-term commercial operations of the ships
Staying with containers
In the last quarter of 2016, 872 reefer heavy ships accepting containers operated 133 different South-North services originating in Latin America, Africa or Australasia. This represented a weekly capacity of 488,000 TEU along with the onboard availability of 71,000 reefer plugs. Apart from some smaller differences, the overall operated capacity, in terms of slots and plugs, remained largely unchanged in comparison to 2015. It is the first time in years this happening.
The largest operators
Despite its serious flirt with containers, at the same time Seatrade Reefer Chartering continuous to be the largest conventional reefership operator with an, albeit reduced fleet of 56x 527,500 cft average ships. Baltic Reefer including its subsidiary Cool Carriers comes second with 42 units/590,000 cft average, followed by Lavinia-controlled Frigoship Chartering: 33/351,000.
In the container segment, measured by reefer plugs on ships operated on the South/North routes, Maersk Line is, again, the number one with 115,000 plugs. MSC comes second with 86,000 devices, having Hamburg Süd sitting on its heels with 79,000 such connections. Combined, Maersk Line and its future subsidiary Hamburg Süd operate 195,000 reefer plugs on the South/North routes, equal to a relevant share of 36%!
Source: Dynamar BV
