Dynamar forecasts that perishable export volumes to fall slightly in 2022
Dynamar has announced the release of the latest edition of its Reefer Analysis. After struggling for many years and after a relatively prosperous 2021, in 2022, container carriers and conventional reefer operators hit the jackpot.
From a cargo perspective overall perishables trade volumes across the major commodity groups, namely Dairy, Fishery Products, Fruit, Meat and Vegetables, rose to a new high of 173.9 million tons in 2021, showing a strong growth of 3.6% year-on-year from 167.9 million tons in 2020. Volumes grew across all the commodity groups, with meat and vegetables both performing well, rising from 32.2 million tons and 39.3 million tons to 34.2 million tons and 42.18 million tons respectively. In regional terms, there was significant variety with perishables exports falling in the Far East and Central America, while growing strongly in Europe and Africa.
In the first three quarters of 2022, container trade reduced by almost 2.5%, with recent months showing higher declines than those at the start of the year. On the supply side, it is the end of congestion, in combination with lower demand, that causes the shortage of ships to dwindle. Where at the peak some 12% of vessel capacity was caught in congestion, in November 2022, the laid-up fleet was approaching 500,000 TEU, which is four times as high as in the first two months of that year.
Looking forward, the seaborne trade of perishable products will face challenges. But the longer-term trend is expected to remain in place. Dynamar forecasts that perishable export volumes will fall slightly in 2022 before rebounding again in 2023. On the shipping side, while for 2023, shipyards are expected to deliver 330 ships with a massive 2.3 million TEU capacity and for 2024, 390 ships with space for 3.0 million TEU are in the pipeline. Slippage or cancellation of orders is likely to reduce the actual deliveries, but still at 20% of the current fleet, the influx of new tonnage is set to severely disrupt the container shipping market.
Up to some extent, the saviour may come from an unexpected side, the Carbon Intensity Indicator (CII) regulation, imposed by the International Maritime Organization, which enters into force in January 2023. Conventional reefer ships will be even more affected by the new CII regulation. Generally, they are old and fuel hungry and many of them will be forced to sail at lower speeds than the market requires. Their competitive advantage of being able to provide faster transit times with their direct sailings than containership operators with their liner services and hub and spoke format will be lost. Already, demolition is at a relatively high level, and it is likely to rise even further.
