Better news for reefer owners

Shipowners with interests in refrigerated ships, better known as reefers, have in the last few months cracked a smile, thanks to the gradual rebound of chartering rates. This came just as the sector was undergoing strong pressures from the competition, mainly due to the inclusion of containers with a freezing system in more and more container ships. Another factor working against reefers, according to a recent study by German-Dutch bank DVB, is the high price for constructing new ships, virtually ruling out renewal of the already old fleet. As a result, there are difficulties in the sector’s development by its own means as shipowners are finding it hard to expand their fleet so as to maintain, even if not expand, their market share. Among Greek companies involved in the sector are the Laskaridis family and the Restis group. Brothers Panos and Thanasis Laskaridis control more than 50 reefers through Laskaridis Shipping, while a significant part of the fleet consists of new vessels as the company had made considerable investments from the early 1990s. Today most shipowners internationally appear reluctant to place new orders because of the increased construction prices and mainly the low freight rates the sector’s modern ships have achieved in recent months. That certainly does not mean that anyone with a young fleet will not benefit in the long term against companies with older vessels. Therefore Japanese shipowners seem to have an advantage as they control the most modern fleets, according to the DVB report. Estimates suggest that 57 percent of the approximately 1,700 reefers in the world are over 20 years old, with some 320 of them having passed the 30-year mark. These vessels usually ship fish, while about 50 of them carry fruit. Container ships have for some time now become the main threat to reefers, as they offer more than double capacity; these vessels can carry 800,000 cubic meters of products refrigerated. This explains their 60 percent market share in this domain, with ships that are faster and with greater fuel autonomy. Reasons for optimism On the other hand, reefers maintain another strategic advantage, in the logistics sector. A large portion of cargo still exits warehouses in bulk, which means that their transport is better made through reefers than container ships. In addition, reefers have a smaller displacement, giving them better access to smaller ports. This is important for producing countries as they do not depend on every port’s infrastructure for loading and unloading cargo, making reefers more attractive to specific trade sectors. The report notes that container ships which can carry more than 2,800 containers usually require top port infrastructures in order to unload their cargo. There is another important dimension noted by DVB that is in favor of reefer owners: Importers and traders lose about 10 percent of their revenues when container ships carry their products. This is due to the bad state in which products reach their destination, mainly because of the lack of needed humidity inside the containers. This weighs heavily in traders’ choice of reefers instead of container ships. Reefer shipowners are also optimistic because of the development of a new design for ships, which in the long term could help considerably. This vessel will be a particularly fast ro-ro reefer, able to carry vehicles, too, reaching a speed of 30 knots. This is seven knots faster than modern container ships with high fuel autonomy that can carry fresh products. These new ships will reportedly be able to transport goods needing refrigeration to a destination, and on the way back carry cars and trucks.