Recently, Howard Posner, president and managing director of NAGA Logistics, posted on LinkedIn about the comeback of the conventional reefer market—one that had been losing considerable market share to containerized carriers in recent years.
The post included a link to IrishShipbrokers.ie, which reported a surge in reefer rates due to “the chaos that has developed in the container market as a result of the Coronavirus outbreak.”
While the major containerized carriers were struggling with disruptions in China—reefer containers stuck at Chinese ports, blank sailings, and the downstream impact of perishables exporters waiting for reefer boxes—conventional reefer carriers were available to fill the void.
Posner is a staunch advocate for those that operate in the conventional reefer market, especially Seatrade, which he describes as a “specialized” carrier that offers multiple modal options. For example, Seatrade’s fleet includes reefer and container vessels, multi-purpose carriers, freezers and juice carriers. Its “fast, direct and dedicated” service proposition also sets it apart from the containerized carriers, according to Posner.
Some contend that both conventional reefer carriers and containerized carriers can flourish by doing what each does best, and that there is plenty of business to go around considering the ongoing growth in the global perishables market.
Despite the present opportunities, the disadvantage for conventional reefer carriers is that much capacity has been lost in recent years as older vessels have been scrapped or decommissioned, while newbuilds have slowed. It’s not easy—or cheap—to scale when you’re in the shipping business…ask any carrier that’s lucky enough to have survived consolidation in recent years.
Global supply chains are being put to the test right now. Those that are dynamic, nimble and predictive will persevere, resulting in new and different models for others to emulate. That means all stakeholders, including the transportation and logistics sectors, will emerge with a changed perspective.
Let’s hope this temporary boost for the conventional reefer carriers results in something more permanent.
