FruitTrop Magazine n°239
March 2016 edition: mango close-up, apples and pears, Tunisian dates, Israeli dates.
- Publication date : 5/04/2016
- Price : Free
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Sea Freight - January/February 2016
- Published on 13/04/2016 - Published by Market News Service / FruiTrop
- FruiTrop n°239 , Page From 15 to 15
- Free
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- Product(s) : Sea freight
- Rubrique / Thématique : Review and Forecasts
- Country : Europe , World
- Keywords : Price
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Articles from same magazine
A glance at the monthly TCE averages for January and February suggests that it has been a less-than-satisfactory start to the year for reefer industry stakeholders. The average for the first two months of the year is the lowest since 2012, when bunker prices were more than double current values. While there’s no denying the figures, it is also true that they tell only a fragment of the story. Although it shouldn’t be discounted entirely, the behaviour of the charter market is no longer a reliable indicator of the state of the wider reefer business and, as such, its relevance is diminished.
While it may be important to those owners and operators whose units are not employed in liner business, period charters and/or seasonal COAs, the reduction in size of the reefer fleet coupled with the vessel preferences of individual charterers means the monthly TCE average is more or less exempted from most rate negotiations for such employment contracts.
This is because the major reefer operators, in fleet capacity terms, have taken the view that utilization is more important than the potential gain from spot charters, which is very much the container line, or carrier philosophy. In the new structure, for as long as the reefer continues to add value to the charterer and/or cargo interest, there is a place for the mode on the high seas. Whether the mode can justify its existence to its respective owners depends therefore on whether it can compete on cost with its nemesis.
As long as the cost of bunkers is low, the reefer offers a fast, dedicated and direct ‘taxi’ alternative to the cumbersome boxship ‘bus’ service. However as soon as the price of oil rises to those levels last seen in 2012, the least fuel-efficient reefers will become competitively obsolete overnight.
The year started much as it is likely to go on. There was a significant imbalance between the supply of capacity and demand from charterers and cargo interests, which is only likely to worsen as more container ships and reefer equipment is dumped onto the market.
Despite adverse weather conditions prior to the table grape harvest in Central Chile, volume throughput remained strong as shippers strove to capitalize on the strength of US market and its currency. The load factor was high enough throughout the period to command more tonnage. Indeed, more units would have been deployed or chartered in had it not been for berth restrictions.
The other headline was more about what didn’t happen. Had there been a similar squid catch in the South Atlantic this year as there was in 2014 and 2015, the reefer fleet would have been stretched to the limit of its capacity. However we are back to the start of the cyclical trough: two good years followed by five below average. How charterers will manage demand for specialized reefer capacity when the cycle returns to abundance in 2021 does not bear consideration!
sea freight - large reefers
sea freight - large reefers
sea freight - small reefers
sea freight - small reefers
sea freight - monthly spot average
sea freight - monthly spot average