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6 octobre 2022 - Année XXVI
Journal indépendant d'économie et de politique des transports
05:20 GMT+2
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et de la logistique


The Reefership Market in 2003

Improvement but no clear direction

The fleet 
Major events in the year 2002

The freight market for conventional ships of 350 to 500,000 cu ft

The winter of 2003 in the Baltic and North Europe had a significant impact on the shape of the high season and seems to have been the crucial factor for the increase in freight rates in the period from January to May. Such a severe climate has not been seen for 15 years, as well as the large number of ships caught in the ice in St. Petersburg.

Ice-strengthened ships obviously benefited from substantial premiums, but they were not sufficient to satisfy the total volume of Russian imports. As in the past, owners of old ships took the risk of sending them into the Baltic at the beginning of the winter and some 40 to 50 ships of more than 300,000 cubic feets are calculated to have got caught for a part of the winter, without talking about the voyage times which took much longer to perform due to discharge problems.

The strength of the euro helped the South American fruit exporters who were able to increase sales into Europe. As was the case last year the Russian market was the driving force in the spot market both for fruit imports as well as frozen food. Taking into account the increase in bunker prices, freight conditions on the spot market saw an average improvement over the year of about 15 %.

Paradoxically the repercussions on the time charter rates have been less significant as the rise was between 2 and 5 %. Owners nonetheless tried to take advantage of the very lively market in October to encourage the 'majors' to quickly take on long term cover at rates which were shooting up for the most modern ships. But the latter let the storm blow over and the majority of 12 month time charters were only concluded towards mid-November. The trend had already been set during the summer when the Canaries' contracts, which cover the period from November to the end of April, were fixed with increases of only 3 %.

The lack of clear direction in the medium term can also help explain the lack of enthusiasm on the part of the multinationals to seek term cover for several years or to commit to new units.

In addition to risks which are common to the whole shipping sector, it should be remembered that the reefership market is also susceptible to the risks in climatic variations, natural catastrophes or epidemics and that these factors tend to shy investors away as they prefer to involve themselves in markets which are less difficult to handle.

The fleet

The world reefership fleet has again diminished in size this year. On December 31st 2003 it comprised 1,190 ships of more than 40,000 cu ft for a total capacity of about 335 million cu ft, namely a decrease of about 2.6 %, both in number and capacity of ships compared to December 31st 2002.

Delivery of newbuildings was identical in number to that of 2002, namely 2 units, but smaller in total capacity (380,000 cu ft as compared to 1.25 million cu ft). These are the lowest figures ever registered since the beginning of reeferships. These two ships are due to carry frozen fish. Only three new units are due for delivery in 2004, representing a total capacity of about 1.2 million cu ft. These are the only refrigerated ships on order as at December 31st 2003.

The pace of ships leaving the fleet - scrappings or vessels being retired for other reasons (total loss, conversion) - has doubled in number compared to the previous year, with 34 ships (17 in 2002), for a capacity of 9.4 million cu ft (6.1 million in 2002).

The figures given above correspond to the refrigerated capacity in ships' holds. They have to be adjusted to take into account the increase in capacity of refrigerated containers on units delivered, both on reefers as well as containerships.

Based on this adjustment, in 2003 there has been an increase of about 125 million cu ft on the global supply of refrigerated capacity, which is over a third of the total capacity of the traditional reefer fleet'

The current orderbook of containerships shows that there will be about 153 million cu ft of refrigerated capacity coming onto the market in 2004'

We have seen the delivery of 4 containerships of 2,260 teu from CMA-CGM ('Fort St Pierre' and sisterships) on the Martinique and Guadeloupe run. These units replaced the old PCRP class 'Fort Royal' and marked the end of the ''conair'' system as the new units are operated in combined service with Marfret and Maersk on the Continent and are equipped with 550 refrigerated plugs for standard reefer containers.

The same situation will occur in South Africa next year where Safmarine-Maersk and DAL will replace the 'S.A. Helderberg', 'S.A. Sederberg', 'S.A. Waterberg' and 'Maersk Constantia' equipped with the 'conair' system by ships of 4,300 teu with 900 refrigerated plugs. With P&ONL simultaneously replacing its 'Heemskerck' and 'City of Cape Town' by two new vessels without the "conair" system and DAL replacing its 'DAL Kalahari', there will be no more "conair" vessels on this route.

A large number of second-hand ships have been sold in 2003, the largest in the last 7 years.  Whereas Seatrade and Star Reefers have been expanding their fleets with modern ships, it is particularly the Russians who have acquired the old banana ships. Out of a total of 75 ships reported sold, 15 have gone to Russian owners. One might have feared that these acquisitions would have had an influence on the spot market, but the imported volumes have continued to expand this year, helped by the growth of the Russian economy.

Major events in the year 2003

NYK-Star Reefers announced in June that they had decided to end their partnership due to a difference on the strategy to pursue. NYK came to an agreement to share tonnage with Lauritzen-Cool (about 70 ships ranging from 37,500 with 760,000 cu ft) and took a 50 % share in Lauritzen-Cool Logistics.

With effect from May 1st 2003 Russia initiated import quotas for poultry, beef and pork. This measure was aimed to protect domestic production. Russia imports some 2.7 million tons of meat per year and produces 4.7 million tons. Fresh fruit imports into Russia reached 2.6 million tons, getting back to their best levels since 1998 and it is anticipated that there will be an increase of 10 to 15 % for 2004.

In Europe the heavy frosts in April affected Italy, Greece and France. A quarter of the production of stone fruit was lost. During the summer an exceptional heat wave which lasted over a month had tragic consequences for much of the cultivated areas in Europe.

In Morocco the citrus fruit and vegetable harvest was particularly good with a record level of 2 300 000 tons and was accompanied by an increase in exports of over 10 % compared to the previous season (namely 877,000 tons). In all 398,000 pallets were loaded in conventional ships, of which 200,000 went to the Continent and Canada, and the balance to Russia, the Baltic countries, and the Red Sea, sold fob. Nearly all the tomatoes exported went by truck via Gibraltar namely some 400,000 pallets.

In the Ivory Coast banana producers (220,000 tons exported p.a.) were more affected by the poor conditions of the market in Europe rather than their local political crisis. Despite a tense situation, exports of pineapple and bananas were able to continue their normal routing through Abidjan. The 2003 drop in the volume of pineapples was due to bad climatic conditions especially during the period from 15 November to 15 December.

In Cameroon according to the FAO banana production was up 30 % over the last three years (260,000 tons exported in 2002 of which 90 % to Europe). It is predicted that the producing countries of West Africa next year will be exporting double the amount of bananas towards Europe as the Caribbean countries, members of ACP.

South African exports of citrus fruit slightly surpassed a million pallets and were stretched out until the end of the summer, which allowed the market to remain buoyant, as a lot of these cargoes were headed for Russia in conventional ships (the containerships are not yet operating directly into Russia). Sixty-five per cent of apple and pear exports are carried in containers to Europe.

Equador, the world's number one exporter of bananas, experienced producers' strikes in May then in October, with the latter hoping to obtain a government guarantee for a minimum price. Unfortunately this is a recurring problem and the market price level of 'dollar-banana' stayed too low to allow exporters to pay a minimum price, including the cost of packing and freight.

The Costa Rican pineapple production is increasing strongly, and given the area under production, which has gone up from 6,100 hectares in 1995 to 15,000 hectares today, the over-production risk is high. Costa Rica is the first exporter of fresh pineapple (roughly 387,000 tons) to the US and Europe. It is the biggest rival to the Ivory Coast, which exports about 240,000 tons to Europe. The Philippines export 154,000 tons, followed by Mexico with 117,000 tons.

In Brazil according to the FAO the area cultivated for bananas is being greatly increased mainly through the initiatives of Del Monte. Brazil was only exporting 72,000 tons of bananas in 2000, whereas in 2003 this now reaches a total of about 255,000 tons.

In Argentina fruit volumes being exported have grown this year, with the weakness of the peso being a major argument within the international discussions. Europe is the main client for pears, apples and grapes from Argentina: 450,000 pallets of fruit were exported in 2003. In 2003 Russia became the major client of Argentina with 65,000 tons imported covering all fruits.

Exports of citrus fruit in 2003 reached roughly 450,000 tons (lemons and grapefruit for 220,000 pallets and oranges for 250,000) of which 67 % is headed for the Continent and 14 % to Russia.

Owners of container lines have reinforced their presence in the Argentinean export market to Europe, and out of 340,000 pallets transported Maersk moved 60,000 in containers.  Half of the exports of pears and apples (about 200,000 pallets) should be transported by Maersk, Hamburg-S'd and CSAV in 2004.

In Chile one has seen the same phenomenon as in Argentina with an accelerated competition in the transport of fruit to European destination, between the conventional reefer ships and the containerships. Maersk has signed an agreement with Del Monte for Europe which covers 11.1 million cardboard boxes exported by this group, of which 15 to 20 % is towards Europe. With a transit time of 19 days to Rotterdam, Maersk seems to have attracted the grape exporters to adopting the 'container' solution.

2003 was a record year for Chile, according to ASOEX (the association of exporters of fresh products), with volumes reaching 181 million cardboard boxes exported for $ 1.63 billion, namely 4 % more in value than the previous year. Although the US and Canada still remain the principal markets, Europe has increased its share by 20 % in volume thanks to the strength of the euro and also to the free trade agreement signed in February with the European Union, which has permitted Chile to sell her grapes without any customs duty (60 % of the total in value of exports to Europe).

In New Zealand, where climatic conditions led one to fear a drop in the kiwi production, the spring frosts did not have any serious consequences and despite the firmness of the New Zealand dollar, sales progressed 8 % in value. New Zealand's kiwi production amounts to 242,000 tons in 2003.

The boost in New Zealand export was also facilitated by the drop in Chilean production down 8 % (119,000 tons) as well as the consequences of the heat wave in Europe last summer. Bad weather severely curtailed the apple crop which was only 15 million cardboard boxes instead of the 17.5 to 18 million normally and resulted in the cancellation of several ships to Europe and conventional ships to the US West Coast. Fifty-nine per cent of apple exports are now shipped in containers as compared to only 38 % in 2000.

The kiwi production in China has gone from 118,000 tons in 1999 to 340,000 tons in 2003 and it is predicted to reach 400,000 to 500,000 tons in 2006. What share of this will be exported?

At the same time China imported about 400,000 to 425,000 tons of bananas mainly from the Philippines whose domestic production is estimated to be 5.3 million tons. The Philippines are ideally situated to supply the Chinese market with tropical fruits and a considerable increase in trade is expected over the next 3 years, judging by the investments being made by the Japanese group Sumitomo ($ 50 million in banana plantations).

The freight market for conventional ships of 350,000 to 500,000 cu ft

The high season of 2003 was the best seen in the last 5 years. Rates began to climb at the beginning of February to reach 78 cents at the end of the month, then 118 cents in March.  Unlike 2002, the market resisted well in April with an average of 73 cents, then 50 in May and 40 cents in June. Laying-up of ships was thus delayed, to such an extent that by mid-August there were only some 40 ships laid-up, half the number affected as at the same time in 2002.

A new phenomenon occurred with rates having fallen somewhat after Easter then climbing back up to 70 cents, which led importers to cover their needs with consecutive voyages up until the summer.  It is worth remembering that although the Iraqi conflict had little impact on movements into the Persian Gulf, it nonetheless led to a shortage of refrigerated containers in the zone, due to the excessive inland transit-times of containers in Iraq.




With so few ships on order (almost none ordered for several years now) this sector of the market is not attractive enough for owners to invest in new ships. This is partly explained  by the lost ground in favour of containerisation, and also due to the youth of the conventional reefer fleet, as 50 % of ships of more than 300,000 cu ft are still under 15 years-old!

Containerisation has already absorbed a large part of the frozen goods seaborne trade, previously carried in the older conventional reeferships. Theoretically around 60 ships of over 25 years-old, on a total fleet of 425 units of more than 300,000 cu ft, should be sold soon for demolition, especially if scrap prices remain so high and if their replacing is no longer required on the market.

In the future, the market should probably go to a large extent toward the use of large reefers for fruit transportation. To compete with containerships, these ships should offer, a high service speed at least as fast as liners (around 23 knots), a higher quality standard in terms of transportation efficiency and cargo-mix facilities (containers, pallets) and some good cargo handling facilities.

Shipping and Shipbuilding Markets in 2003


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I primi hanno inviato un documento alla Commissione UE motivando le ragioni del rinnovo del regolamento. I secondi hanno spedito una lettera alla commissaria Vestager in cui spiegano che l'attuale sistema premia solo i vettori marittimi
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Collegherà Gliwice e Pordenone tre volte alla settimana
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