shipping sector reports

Clarkson Research Services Autumn 2013 67

SHIPPING SECTOR REPORTS

The containership sector continues to faced up to oversupply with trade growth remaining fair-ly lacklustre in historical terms. Global trade is projected to expand by 4.7% in full year 2013, an acceleration from the 3.1% growth of 2012. Following the unprecedented 9.2% decline in volumes recorded in 2009, when global trade collapsed, volumes subsequently recovered, before growth slowed noticeably last year. This year, growth is expected to return to the main-lanes, and yet, despite a slight softening in de-mand growth from a number of large emerging economies, overall, non-mainlane trade will remain the key driver of global trade growth.

The container capable fleet is projected to grow by 6.2% in 2013 to reach 19.6m TEU, with fur-ther growth of 5.3% forecast for 2014. Overall. the sector continues to battle the overhang of surplus capacity created by 2009’s trade con-traction. A combination of slow steaming and idling have been used to soak up excess supply. However, there is a mismatch between centres of recent demand growth - non-mainlanes - and the orderbook, which is dominated by large Post-Panamax ships. 8,000+ TEU (VLCS) ves-sels account for 67% of the capacity delivered so far this year, following the 70% share in 2012. The majority of these VLCSs have been deployed on mainlane trades upon delivery. This has led to the redeployment of smaller Post-Panamax vessels onto other routes in a ‘cascade’ of tonnage down the trade lane hierar-chy. This process has a significant impact on supply on the non-mainlane trades, thus greatly affecting pressure on the charter market.

Volatility has continued to bedevil freight rates on the mainlanes in 2013 so far, with dramatic swings seen in Far East-Europe spot rates in particular, as carriers have attempted to supress active running capacity growth in the face of a substantial VLCS delivery schedule. Mean-while, a combination of marginally lower than expected volumes on some trades, and signifi-cant cascading, has piled pressure on a number of non-mainlane freight rates. While global sup-ply growth is projected to slightly outpace glob-al demand growth across 2013 as a whole, the management of the capacity cascade will be key in determining supply on individual trade lanes, while cascading and idling of tonnage will con-tinue to affect prospects for the charter market.

The containership fleet is mainly made up of large cellular vessels capable of carrying (in containers) most types of cargoes previously carried on non-fully cellular vessels. However, in the wider liner market there still remains a number of “general cargo” vessels not intended or equipped for full loads of containers, but which supplement earnings in specialist and niche cargo sectors by carrying containers. Multi-Purpose (MPP) vessels are non-cellular (i.e. without overall provision of fixed cell guides for containers) ships with box-shaped holds and container-carrying capability. These, and the General Cargo fleet (consisting of faster “GC Liners” and smaller “GC Tramp” vessels), operate within niches across the liner industry and in an area shared with small bulkers (see our Containership Register for full definitions). Meanwhile, the Ro-Ro fleet comprises a wide range of vessels, some with cargo handling gear (Ro-Ro/Lo-Lo), others with significant accom-modation for drivers and passengers (Ro-Pax). Even more specialised vessels in the generic Ro-Ro fleet are PCCs (Pure Car Carriers), which are primarily designed for and operated in the motor vehicle trades. There also remains a dis-tinct specialised reefer fleet, despite deep incur-sions made by fully cellular containerships into this sector using refrigerated containers.

2.4 LINER VESSELS

1st September 2013 figures

THE LINER MARKETSHIP TYPES

FULLY CELLULAR CONTAINERSHIPS

5,125 SHIPS OF 16,918,248 TEU

MULTI-PURPOSE3,266 SHIPS OF 1,481,305 TEU

GENERAL CARGO LINER76 SHIPS OF 1.02 M.DWT

GENERAL CARGO TRAMP1,606 SHIPS OF 13.22 M.DWT

CONBULKER242 SHIPS OF 9.03 M.DWT

BARGE/HEAVY LIFT37 SHIPS OF 0.45 M.DWT

RO-RO930 SHIPS OF 8.43 M.DWT

VEHICLE CARRIERS751 SHIPS OF 11.81 M.DWT

REEFER870 SHIPS OF 231.3 M.CU.FT

FULLY CELLULARCONTAINERSHIPS

"DEEP SEA"(>3,000 TEU)2,063 SHIPS

12,782,368 TEU

"INTERMEDIATE"(1-2,999 TEU)1,897 SHIPS

3,426,989 TEU

"FEEDER"(<1,000 TEU)1,165 SHIPS708,891 TEU

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Clarkson Research Services 68 Autumn 2013

LINER VESSELS SHIPPING SECTOR REPORTS SHIPPING SECTOR REPORTS

Market Trends

The box freight rate environment has been mixed in 2013 to date. Container freight rate volatility on the Far East-Europe mainlane has continued as carriers have implemented, and then struggled to cling on to, a succession of general rate increases. With demand remaining relatively lacklustre, and deliveries of very large containerships coming thick and fast, operators have faced significant supply management challenges. By the beginning of September, rates for shipping boxes from Shanghai to Europe stood at $1,073/TEU, having fallen sharply from $1,501/TEU at the start of August, but a significant improvement on the low of $514/TEU recorded at the end of June. Meanwhile, Transpacific freight rates have proved more stable, averaging $2,130/FEU over the first eight months of 2013, 7% below the full year 2012 average. However, a number of non-mainlane freight rates have come under pressure as substantial levels of capacity have been cascaded down from the mainlanes. In 2013, rates from Shanghai to Brazil, South Africa, and Australia have all fallen to their lowest since 2009. Meanwhile, freight rates from China to the Middle East have remained highly volatile.

Meanwhile, the amount of capacity in lay up fell from 0.87m TEU in mid-March to 0.39m

TEU in mid-August. However, charter owned tonnage still accounts for over two thirds of idle capacity, a pool of unemployed tonnage that has continued to limit upside in the charter market. As a result, containership timecharter rates remained supressed through the first eight months of 2013. At the end of August the benchmark rate for a 1,700 TEU vessel sat at just $7,500/day, 38% lower than in May 2011.

Demand Trends

Having grown by 3.1% in full year 2012, latest estimates put global container trade growth at 4.7% this year. Last year, growth was entirely driven by non-mainlane trades, which grew by an estimated 5.1%, while volumes on the combined mainlanes shrank by 0.7%. Mainlane Asia-Europe volumes contracted by 4.7% y-o-y in 2012, but modest growth on the route looks likely return this year. Meanwhile, Asia-US transpacific trade growth is expected to slightly exceed last year’s modest 0.5% increase. Elsewhere, North-South trade is projected to by a relatively robust 5.4% this year, despite a weakening in demand from Latin America. Overall, the largest area of global trade growth this year, as last, is expected to be the intra-Asia trades, projected to expand by 7.4% this year.

Fleet Development

At of September 2013, the containership fleet numbered 5,125 ships of a combined 16.9m TEU. 155 ships of a combined 1.0m TEU have been delivered in the year to date, 67% of which was accounted for by 8,000+ TEU vessels. Scrapping activity has been very rapid, with 133 vessels of a combined 0.30m TEU sold for demolition so far in 2013, after 0.33m TEU was sold for demolition in full year 2012. 56% of the capacity scrapped this year has been accounted for by ships in the beleaguered 3,000+ TEU Panamax sector. Overall, the capacity of the sub-4,000 TEU fleet shrunk by 2.5% in 2013 through August. Charter owners currently own 2,716 vessels of a combined 8.1m TEU, equivalent to 47.8% of the containership fleet in terms of capacity. Fleet capacity ownership is thus relatively evenly split between charter owners and operators, and the orderbook is also in balance. Charter owners account for 50.6% of capacity on order - 1.9m TEU - while operator owners have 210 ships on order, including 38 ships of 14,000+ TEU.

2.4.1 Containership Market

End -12 Sep-13 +/- this year

Box Freight Rates *Shanghai-Europe $/TEU $1,201 $1,338 11.4%Shanghai-USWC $/FEU $2,168 $1,972 -9.1%Charter Rates (per day) *4,400 TEU G'less $8,500 $9,000 5.9%2,750 TEU G'less $5,500 $7,100 29.1%1,700 TEU Geared $6,100 $7,500 23.0%Asset Values $m*NB Price (3,700 TEU) $36.75 $38.50 4.8%NB Price (1,700 TEU) $25.00 $25.50 2.0%10-y-o (3,500 TEU) $13.00 $11.25 -13.5%10-y-o (1,700 TEU) $8.00 $8.75 9.4%Tonnage Supply (000 TEU)Fleet 16,231 16,918 4.2%Orderbook 3,427 3,690 7.7%Fleet Developments **Deliveries 203 155 14.5%Demolition 179 133 11.5%Contracting 74 156 216.2%Second-Hand Sales 152 93 -8.2%*end Aug **2013/ year-to-end Aug % +/- based on annualised figures

Summary

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Figure 2.4.3 Figure 2.4.4


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Containership Timecharter Rates

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Contracting activity has picked up significantly in 2013 so far, with orders placed for 156 containerships of a combined 1.35m TEU. This already dwarfs the 0.42m TEU ordered in full year 2012. Contracting this year has been focussed on the 8,000+ TEU sector, with 100 vessels ordered, accounting for 89% of the total ordered capacity. These include 16 orders for ships of 18,000+ TEU, all placed at South Korean yards, along with 31 contracts for vessels between 13,000-16,000 TEU. In addition, there has also been a spate of contracting in the 8,000-10,000 TEU sector, with orders placed for 56 boxships of a combined 0.51m TEU so far this year. At the start of September 2013, the containership orderbook numbered 471 vessels of a combined 3.7m TEU, equivalent to 21.8% of the fleet in terms of capacity. The orderbook is heavily weighted towards the larger vessel sizes, with 53% of the ships on order of 8,000+ TEU. These 248 ships of a total 3.0m TEU represent 80% of the capacity on order. 99 of these VLCSs are scheduled to be delivered next year, with a further 94 currently on order for 2015. Meanwhile, ships between 3,000-7,999 TEU make up 25% of the orderbook by number and 15% in terms of TEU (102 of these vessels are Post-Panamax class and just 16 are of Panamax beam). In the smaller sizes, there are currently a total of 95 ships of a combined 165,762 TEU on order in the 1,000-3,000 TEU size range, and just 10 ships of a total 8,223 TEU in the sub-1,000 TEU range. Taking into account projected levels of ‘slippage’ and cancellation, 1.6m TEU of capacity is expected to be delivered in full year 2013, while 1.3m TEU is currently expected to hit the water next year. Fully cellular containership capacity looks set to grow by around 7% in 2013 to 17.4m TEU, with 6% growth set to follow in 2014.

Sector Outlook

It is projected that global container trade will expand 4.7% in full year 2013 to 160m TEU, having grown 3.2% last year. Mainlane trade volumes are expected to return to modest growth, having contracted 0.7% in 2012. Last year mainlane growth was dragged into negative territory by the 4.7% fall in Asia-Europe volumes and 5.0% contraction in US-Europe trade as European consumer demand proved very soft. Mainlane prospects now look

marginally more positive, with growth likely to gradually return. Global container trade growth is expected to be led by non-mainlane trades. North-South trades involving Africa and Oceania have expanded robustly so far this year, to some extent offsetting the slowdown in trade with Latin America. Overall, North-South trade is currently expected to expand 5.4% in full year 2013. Non-mainlane East-West trade may well suffer from the deceleration of the Indian economy, and is currently projected to expand 3.4% this year. Meanwhile, intra-regional trade is likely to remain the fastest growing area, expected to grow by 6.6%.

Global containership supply is expected to expand 7.1% in 2013, with overall container capable capacity projected to grow by 6.1%. As a result, overall global supply growth is expected to slightly outpace world demand growth this year. There is a continuing mismatch between the supply of smaller and medium sized ships required by the centres of recent demand growth, and the very large vessels that constitute the majority of the orderbook. The key determinant of individual trade lane supply, and thus freight rates, remains the carriers’ management of the ‘cascade’ down from the mainlanes in the face of rapid VLCS deliveries. As such, significant freight rate volatility may persist even if the underlying global fundamentals prove relatively stable. Meanwhile, as long as there remains a substantial pool of laid-up charter owned tonnage, significant upside in the beleaguered charter market may remain elusive.

Overall, sector fundamentals remain slightly unbalanced this year, and supply levels on individual trade lanes will largely be determined by carriers’ management of service capacity. Furthermore, the impact of the ‘P3’ vessel deployment alliance between the three largest lines (Maersk Line, MSC and CMA-CGM) will become clearer when the proposed scheduling is announced. Looking ahead, box trade in 2014 is projected to increase 6.2%, while the container capable fleet is expected to expand 5.3%. Combined with the recent fall in the level of idle capacity, along with the elevated levels of demolition (which continues to reduce the capacity of the sub-4,000 TEU fleet) and a gradual slowdown of the ‘cascade’, this may well combine to tighten charter market supply in the medium-term.

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Historical Containership Fleet

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The containership orderbook now represents 22% of fleet capacity.

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MPP/General Cargo vessels have traditionally relied on both breakbulk and container ship-ments for their freight. However, some cargoes which have historically been the preserve of the MPP fleet are increasingly being encroached upon by other sectors, a trend exacerbated by the shipping downturn as vessel sectors com-pete more fiercely for diminishing cargo vol-umes. MPP vessels are not designed to specifi-cally to carry only containers, and as such trade in areas which fall outside the scope of the de-manding infrastructure requirements of the con-tainer industry, both in terms of the commodi-ties which they carry and the geographical re-gions within which they trade. At the start of September 2013, the MPP/General Cargo fleet numbered 4,948 vessels with a slot capacity of 1.51m TEU and a total dwt of 43.4m. MPPs plus General Cargo Liners and Tramps together constitute a relatively small share of the con-tainer capable fleet, currently representing 7.9% of total liner TEU capacity.

Fleet Structure

At the start of September 2013, the modern Multi-Purpose fleet (as distinct from General Cargo Liners/Tramps) stood at 3,266 vessels of 29.2m dwt, with a container capacity of 1.5m TEU, and an average age of 14.4 years. Some 67% of MPPs (2,178 vessels) have a capacity of below 500 TEU, while just 270 vessels (8% of the fleet) have a capacity exceeding 1,000 TEU. However, in recent years, owners have tended towards ordering larger vessels - 34 of the 141

MPP vessels currently on order have a capacity greater than 1,000 TEU. Meanwhile, timechar-ter rates for MPP vessels remain low in historic terms, with the benchmark one year timecharter rate for a 17,000 dwt (900 TEU) MPP vessel sitting at $8,150/day in August 2013, 9% below the 2012 average of $8,988/day.

General Cargo Liners predate containerisation, and in recent years this sector has fallen out of favour. Generally, GCLs lack the flexibility of MPPs, and consequently there have been no GCL orders for over a decade. At the start of September 2013, the GCL fleet consisted of 76 vessels with a combined tonnage of 1.0m dwt. Meanwhile, the General Cargo Tramp fleet stood at 1,606 vessels, with a combined tonnage of 13.2m dwt, and an average age of 15.8 years, while the General Cargo Tramp orderbook stood at 52 vessels of a combined 0.55m dwt.

Sector Outlook

The MPP sector has generally remained under pressure in recent years, with increasing compe-tition from other vessel types for cargoes. Cargo which does not fit in standard containers is now increasingly being carried by containership op-erators using a variety of methods, as carriers look to fill capacity in the face of underutilisa-tion. Further containerisation of breakbulk car-goes has also reduced the scope for pure break-bulk trade in the MPP market. More generally, oversupply in both the bulk and containership markets has led to continued encroachment on MPP cargoes by these sectors, contributing to reduced MPP demand which is likely to remain under pressure in the short-term. As a result, scrapping levels have remained firm. 55 MPP vessels of a combined 0.77m dwt were sold for demolition over the first eight months of 2013, while 57 ships of a combined 1.0m dwt were delivered over the same period, 27 of which in the 20,000+ dwt range. 25 MPPs of a combined 0.47m dwt have been contracted so far this year.

However, some demand for MPP vessels will persist, as the ships have a significant competi-tive advantage when it comes to the handling of serious heavy-lift cargoes. Ships with larger TEU capacities, heavy lift capability and/or high grade specifications are likely to find em-ployment, as demand in the project cargo sector is likely to steadily increase, while short-sea container trade should eventually recover.

2.4.2 MPP/General Cargo Market

End -12 Sep-13 +/- this yearCharter Rates (per day) *17,000 dwt (liner) $8,800 $8,150 -7.4%9,000 dwt Geared $6,350 $5,750 -9.4%Tonnage Supply (m.dwt)MPP Fleet 28.95 29.18 0.8%MPP Orderbook 0.14 0.10 -27.0%General Cargo Fleet 14.31 14.24 -0.5%General Cargo Orderbook 0.80 0.55 -31.0%Fleet Developments **MPP Deliveries 144 57 -40.6%MPP Demolition 98 55 -15.8%MPP Contracting 13 25 188.5%MPP Second-Hand Sales 54 47 30.6%GC Deliveries 83 25 -54.8%GC Demolition 47 30 -4.3%GC Contracting 24 9 -43.8%GC Second-Hand Sales 30 22 10.0%*end Aug **2013/ year-to-end Aug % +/- based on annualised figures

Summary

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The 9,000 dwt MPP charter rate has declined by 9% since

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7.4 The General Cargo Market

The Ro-Ro fleet is split into four main vessel types. Although relatively aged, the fleet pro-vides significant flexibility, being able to carry diverse cargoes and serve ports that are other-wise difficult to access for more conventional vessels, particularly fully cellular container-ships. The average age of a Ro-Ro vessel stands at 20 years, indeed 22% of the fleet was deliv-ered before 1980. Since the onset of the down-turn in late 2008, the rate of Ro-Ro scrapping has generally exceeded that of deliveries, and as a result, at the start of September 2013 the Ro-Ro fleet (excluding Pure Car Carriers) com-prised 930 vessels of 8.4m dwt, having fallen by 2.4% in dwt since the start of 2013.

Fleet Structure

Due to the diversity of the Ro-Ro fleet, analysis is complex. Breaking the fleet down gives:

145 Ro-Ro/Freight/Passenger vessels, with an average size of 6,401 dwt and an average age of 18.5 years. 138 Ro-Ro/Lo-Lo vessels averaging 6,729 dwt, and 23.2 years of age. 552 full Ro-Ros with an average age of 20.8 years, and an average lane length of 1,804m. Their average size is 7,564 dwt. 76 Ro-Ro/Container vessels. These ships aver-age 23,600 dwt, and 16.9 years of age. They have an average lane length of 3,229m.

At the start of September 2013, the overall Ro-Ro orderbook comprised 42 vessels totalling 1.14m dwt, equal to 13.5% of current fleet ca-pacity. Contracting in the Ro-Ro sector has been very quiet so far in 2013, but over the last few years it has been focused on the larger siz-es, with 25 of the 42 vessels on order greater than 15,000 dwt.

The broader Ro-Ro fleet shown in the table also comprises Pure Car Carriers (PCCs), which presently number 751 vessels with a total ton-nage of 11.8m dwt and an average vehicle car-rying capacity of 4,848 units. In line with the general trend for vessel upsizing, recently deliv-ered PCC vessels have tended to be larger ca-pacity ships, while the fleet as a whole includes 311 vessels that are each able to carry in excess of 6,000 vehicles. Contracting in recent years has been heavily skewed towards larger vessels, and 42 of the 46 PCCs on order have a car car-rying capacity of greater than 6,000 vehicles, and levels have been robust so far in 2013, with 20 PCCs of a combined 141,885 vehicles or-dered, including six vessels with a capacity of over 8,000 cars. In terms of capacity, the PCC orderbook is equivalent to 9.6% of the fleet.

Sector Outlook

The Ro-Ro sector was severely affected by the global downturn of 2009 which decimated trade volumes in the key European short-sea market. Consumer demand in Western European has since remained weak, with a strong recovery in volumes as yet proving elusive. As such, the rate of scrapping in the Ro-Ro sector has re-mained steady, with 25 Ro-Ros of a combined 0.40m dwt demolished since the start of 2013. While major Ro-Ro operators remain cautious about trade growth prospects in the short-term, an improving economic outlook in Europe should eventually support a return to freight volume growth. Meanwhile, overall ro-ro fleet capacity looks set to continue to shrink.

In the PCC market, growth in global car trade is projected to slow to 1.8% in full year 2013, to reach 22.4m cars, having grown by a very strong 12% in 2012. Volumes are likely to re-main slightly below those of 2007, emphasising the severity of the downturn - global seaborne car trade collapsed 34% in 2009. Latest figures indicate that total Korean automobile exports fell by 7.9% y-o-y in 2013 through July to 1.8m units, while Japanese auto exports fell by 6.4% y-o-y to 2.7m units. Consumer demand for cars in Europe remains weak, while Chinese auto imports have also slowed this year. However, the gradual diversification of centres of car production and consumption is likely to drive robust trade growth in the medium-term, and expansion in PCC capacity looks limited to less than 2% this year and less than 3% in 2014.

2.4.3 Ro-Ro Market


Tonnage Supply (m.dwt)Fleet 20.33 20.18 -0.7%Orderbook 2.17 2.20 1.3%Fleet Developments *Deliveries 64 24 -43.8%Demolition 52 35 1.0%Contracting 44 23 -21.6%Second-Hand Sales 34 11 -51.5%

* 2013 figures are year-to-date, % +/- based on annualised figures

Includes RoRos & PCCs.

Summary

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0.2

0.4

0.6

0.8

1.0

1.2

1.4<=

198

0

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

m dwt


Ro-Ro Fleet Age Profile (excl. PCCs)

The average age of the Ro-Ro fleet stands at

20.3 years.

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0

2

4

6

8

10

12

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

m dwt


m dwt

Historical Ro-Ro Fleet (excl. PCCs)

10,000 dwt +2,500-9,999 dwt

Start year fleet (LHS)

Deliveries (RHS)2013 = year to

date

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

<= 1

980

1983

1986

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1992

1995

1998

2001

2004

2007

2010

2013

m dwt


PCC Fleet Age Profile

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0.2

0.4

0.6

0.8

1.0

1.2

1.4

0

2

4

6

8

10

12

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

m dwt


m dwt

Historical PCC Fleet

Start year fleet (LHS)

Deliveries (RHS)2013 = year to date

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The specialised reefer fleet has continued to suffer from increasing competition from fully cellular containerships, as liner services have encroached on the traditional cargoes of reefer vessels. Oversupply of boxships on the mainlane container routes has led to the “cascade” of relatively large, high reefer capacity containerships onto North-South trades, which have benefited from growing consumer demand in developing economies in the southern hemisphere. As a result, there has been an abundance of new containership capacity on some key reefer trade routes, including those out of South America. Indeed, containerships now dominate global seaborne refrigerated capacity. However, despite increased competition with boxships, a number of reefer trades still exist where containerisation is not entirely feasible or preferential, especially where liner network structure is insufficient, and so some demand for the services provided by traditional reefers is maintained.

Fleet Structure

At the start of September 2013, the global reefer fleet numbered 870 vessels with a combined capacity of 231.3m cu.ft. The specialised reefer fleet has been in decline since the mid-1990s, when reefer capacity on containerships began to expand rapidly. Investment in reefers has been very sparse for a number of years - there are just three vessels on order. The current fleet has an average age of 26.0 years, with 23% of reefer vessels built in 1980 or before. Pressure placed on the fleet by weak European consumer demand, as well as the aggressive competition from containership

lines on key fruit trades out of Latin America and Africa, has led to high levels of demolition. 74 reefer ships of a combined 27.3m cu.ft were sold for scrap in 2012, equivalent to roughly 10% of total fleet capacity.

Reefer Market Developments

In 1H 2013, the average spot rate was 68 cents/cu.ft., a 62% y-o-y increase. The effects of 2012’s significant scrapping, as well as a 250,000 cartons/week increase in Ecuadorian banana export volumes, drove a recovery in Q1 2013 peak season spot rates. There was also a general increase in demand for specialised tonnage owing to the effects of the general rate increase for reefer boxes implemented by container lines at the start of the year. Most major lines imposed a $1,500/TEU rate increase on all reefer cargoes. This was seen by the specialised reefer industry as an indication that cellular carriers had long been running a loss on reefer cargoes in order to capture market share. In addition, port labour disputes in Chile reduced access for container liner services and benefitted the specialised reefer fleet. As a result, rates for the southern citrus and kiwi fruit trades peaked at 150 cents/cu.ft., the highest for several years.

In the medium-term however, the specialised reefer fleet is expected to continue losing market share to containerships. A significant number of contracts for containerships in the 8,000-10,000 TEU sector have recently been placed, each with a specification of 1,000+ reefer plugs. Deployment of many of these vessels is likely to be on the larger North-South trades. Indeed, the shift of cargoes from reefers to containerships is most likely on the fruit trades involving Latin America and Sub-Saharan Africa exports to developed nations. Box volume growth on these trades in recent years has led to the deployment of increasingly high reefer capacity containerships, a trend that may well accelerate as the upsizing of boxships on North-South trades continues.

Some resilient demand for reefers for the transport of highly perishable cargoes, especially on smaller routes, is likely to remain, particularly as the premium compared to containership rates closes. However, in general fully cellular vessels are expected to continue gaining market share of reefer cargo.

2.4.4 Reefer Market


Freight Rates (per cu.ft) *270,000 cu.ft vessel 84c 62c -23.5%Tonnage Supply (m.cuft)Fleet 235.7 231.3 -1.9%Orderbook 1.1 0.5 -52.8%Fleet Developments **Deliveries 0 2 #DIV/0!Demolition 74 11 -77.7%Contracting 1 1 50.0%Second-Hand Sales 11 5 -31.8%*end Aug **2013/ year-to-end Aug % +/- based on annualised figures

Summary

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0

25

50

75

100

125

150Ja

n-03

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04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

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Source: Industry Sources, CRS

270k cu.ft Reefer Spot Rates

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250

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2001

2003

2005

2007

2009

2011

2013

(f)

mt

Source: GTIS, Clarkson Research Services

World Trade: Perishable Commodities

FishMeatDairy ProductsOther Fruit & Veg.Deciduous FruitsCitrus FruitsBananas

0

5

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15

20

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30

35

<= 1

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2001

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2013

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Reefer Fleet Age Profile

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3500

4000

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2013

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Historical Reefer Capacity

Containership Reefership

Fleet data at start of year

Boxship reefer capacity now provides the vast majority of total

reefer capacity.

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shipping sector reports

Documents