Rebound leads on Far East routes, high demand in Latin America


The refrigerated cargo market is expected to grow between 2% and 3% in 2023, driven by the momentum of Far East routes, according to the monthly Ocean Reefer Market Update May-June report published by logistics company DHL. The first two months of the year were slow for cold cargo, with volumes even lower than the January-February months of other years, due to weak movement on transpacific, intra-Asia and transatlantic routes to the East. However, March and April marked a slight improvement that bodes well for the rest of the year. “We believe that overall reefer volume in 2023 will finish 2-3% above last year’s levels, as we expect underperforming routes to recover during the peak season in the second half of the year,” read the report.


Routes and volumes


According to the report’s breakdown, routes to and from Latin America are in line with global trends, although the region is experiencing a slight shortage of reefer containers due to its high demand for cold cargo. Thus, South American exports to Europe enjoy stable rates and high availability, while Argentina, Brazil, Chile, Mexico and Peru are progressively recovering 40′ reefer inventories. “Ask for a 15-day lead time before sailing to obtain space and equipment, especially in all WCSA ports. Port congestion tends to overcome in Colombia, Panama and Peru,” the report warns. Meanwhile, on the Asia Pacific route there is a slight concern about the supply of empty 40-foot reefer equipment, especially on the East Coast, as reefer volumes in the market remain strong with exports to China. Routes within the region are tighter on plug availability and the recommendation is to book 30 days in advance for outbound cargo to North America.

Exports from North America to the southern hemisphere show stable rates, with rising demand causing a shortfall in 40-foot reefer container equipment at ports such as Norfolk, Oakland, Seattle and Vancouver, with flows to WCSA and ECSA. 


European exports to the Latin American market continue to see rate erosion on both the West and East coasts. “South America is an area of demand and due to low rates shipping lines are expected to take advantage of booking to the area, as there are also no space issues,” reads the report. Meanwhile, European exports to North America, rates have also fallen to pre-Covid-19 values and no space problems… the issue will soon be to adjust capacity for the lower demand.


New capacity developments


Some shipping lines are working to increase and strengthen their fleet on certain routes, such as Asia-North America, in addition to strengthening port infrastructure in key ports, as is the case of APM Terminals in Rotterdam, which will expand the Maasvlakte-2 container terminal to come into operation in 2026. Likewise, the first half of April showed a reduction in the fleet for the third consecutive fortnight, decreasing the number of inactive vessels as they rejoined routes that were less active during January-February. “In the last two weeks, inactivity dropped by 27 vessels and 71,451 TEUs, 5.3% of the cellular fleet. We expect idle capacity to drop below 5%,” the report notes.  


Meanwhile, demolition sales have increased, with 28 500+ TEU containerships, totaling 48,555 TEUs at recycling, an increase over last year, which saw no sales. Wan Hai, Transworld and MSC are the most active sellers, but still the pace is down compared to previous years due to a high demand charter market. Scrapping is expected to pick up in the following months.