Some sixty ships were brought out of lay up too early at the start of the year whereas demand mainly from Chile and Equador was not strong enough to be able to absorb such a sudden supply of tonnage.

Spot rates remained depressed until the end of February with the market falling victim to poor weather conditions in Central America and Argentina. In early March the combined demand of the southern hemisphere fruit exporters pushed up the market, but without ever going over 90 to 95 cents for modern ships of 500,000 cu ft and having good container capacity on deck.

The dollar’s strength relative to the euro helped Chilean fruit exporters into the United States, but with the ships’ rotation being much shorter, the reduced exports to Europe had a negative effect in terms of tonnes-miles and the number of ships chartered.

Generally owners experienced a high season comparable to the previous year, while the period from May to the end of the year was far better in 2001 and more promising for 2002.

As from mid-June more than 80 ships were laid up and some ten were sold to scrap. Russia now plays an ever increasing role in the spot market, as it not only regularly imports bananas but also a number of other fruit from the southern hemisphere throughout the year (nearly 1.5 million tons of apples, pears, and citrus fruit).

We have seen again this year that the spread in rates between the high and low seasons is tending to narrow and that container utilisation during the high season is able to cover peak demand without having to go onto the spot market too often.

In the standard palletised ship’s size of 380,000 / 420,000 cu ft, the Canary contracts were signed in July for time charter periods from November to early May between 70 and 76 cents, namely 5 % more on average than the previous season (a total of eight ships).

Owners, who did not lay-up their ships too early, were often able to fix them in the summer at better rates than in the autumn. Time charter rates reported for conventional palletised ships of 450,000 / 500,000 cu ft averaged 32.5 cents in June, 23.5 in August and September, to fall to 19.5 cents in October before rising to 35 cents in November.

July and August which are historically the most difficult months for owners saw a healthy activity thanks to the export of citrus fruit from South Africa and South America towards Europe and Asia, on one hand, and a recovery of banana prices in the U.S. and Europe on the other.

In the last quarter the most noteworthy improvement was seen for small sizes at the start of the citrus season from Morocco to Scandinavia, Russia, and the northern Continent. Rates jumped from 45 cents for palletised ships of 2,000 / 2,200 pallets to more than 70 cents in few weeks. This was partly due to the fact that Moroccan owners decided not to reactivate their old ships but to put them up for sale and also to work the citrus cargoes on a spot basis.

Deliveries of newbuildings has again dropped considerably; four ships with about 1.3 million cu ft were delivered in 2001, against 13 with about 6.3 million cubic feet in 2000. They are the lowest figures seen since 1959.

Only three new units will be delivered in 2002, representing a total capacity of some 1.2 million cu ft.

It is surprising to find that despite the market weakness, the pace of ships being withdrawn (scrapped or for other reasons like total loss or conversion) has noticeably slowed down in number with only 16 ships being demolished (as against 27 in 2000), which goes against logic. In terms of capacity the volume dropped in the same proportional order, with the 16 ships totalling 5.3 million cu ft (compared to 9.5 million cu ft in 2000).

The figures given above are based on the refrigerated capacity in the reefer ship’s hold. They should be interpreted by taking into account the increased capacity of refrigerated containers on delivered new units, both on reefer ships as well as containerships.

In practice we have seen in 2001 an increase of about 134 million cu ft in global refrigerated capacity, equal to nearly a third of the total capacity of refrigerated fleet.

The majority of analysts are in agreement that for any hope of a lasting improvement in the reefer market a roughly hundred ships of over 300,000 cu ft should be scrapped. At the start of 2002, 35 ships of over 300,000 cu ft will be between 25 and 29 years old and 21 ships will be over 30 years, representing a total of 56 ships and in volume about 10 % of the fleet of over 300,000 cubic feet, out of 505 ships in total in this segment.

The reversal in the containership market which reached historic lows at the end of the year 2001 for most sizes, further aggravates the competition within the perishable goods traffic. Aware of this risk, the large operators of reefers are developing regular parcel services and are getting established in places like South Africa, South America and New Zealand where the various export groups are more dispersed.

Even if transport by container is an operation requiring considerable investment and requires on average a minimum of three sets of refrigerated containers units to assure a regular service, it is disturbing to see coming onto the market this year 200 new containerships with a theoretical capacity of 80,700 reefer plugs compared to 144 ships with 47,000 plugs delivered in 2000.

Today we can see that orders for refrigerated ships are virtually nil, as the return on investment in this market over the last five years has been minimal if anything at all. Owners have reacted by reducing their overheads and in laying-up their ships for part of the year, but often at the cost of good regular maintenance.

However nothing can replace in terms of quality of transport the specialised ships of the last generation which offer unbeatable transit-times, the possibilities of additional spaces for containers on deck, and a great operating flexibility.