Container shipping still faces tough economic, investment climate: carrier execs

The container shipping industry was out in full force at the recent Cool Logistics Global conference, held 24-26 September in Rotterdam, Netherlands.

Over 250 perishable shippers, carriers, logistics and transport providers from 30 countries gathered to discuss key topics which included the outlook for refrigerated container shipping, with senior carrier executives including Peter Fredriksen, Executive Board Member at Hamburg Süd and Thomas Eskesen, Head of Global Refrigerated Business at Maersk Line, warning that the container shipping industry still faces a very tough economic and investment climate, said a Cool Logistics report from the event.

Stressing the continued need to focus on profitability versus market share, Eskesen said that global reefer traffic volumes are likely to grow just 1% this year. Maersk Line will, as a result, continue to defer any new investment in reefer equipment through 2014, he said.

Hamburg Süd s Fredriksen said that Hamburg Süd was likely to make a modest investment in new boxes next year after a 2-year break, but echoed the general sentiment of extreme carrier caution, given the current mix of sluggish volume growth and considerable new ultra-large tonnage coming on-stream in the near future.

Eskesen confirmed that Maersk had lost “double digit” reefer cargo volumes since announcing its $1500 general rate increase at Cool Logistics Global 2012, adding: “We expected that.”

While the GRI was not uniformly implemented, Eskesen said that the move had prompted a “breakthrough” in favour of longer-term 3-5 year service contracts as a means to break the weary cycle of rate volatility and allow for better capacity planning.

“In some southern hemisphere markets up to 60% of the business is now being done under long-term contracts, and that means that we can send boxes down to the shippers and make sure that the equipment is there for them,” he said.

The launch announcement of a new ro-lo reefer ship design by industry veteran Birger Lindberg Skov, Managing Director of Reefer Intel and Per Westling, Managing Director of Stena RoRo, launched avigorous debate on the future role of specialised reefer versus reefer container logistics.

Other major conference themes included the rise of emerging markets, covering new ‘south-south’ cross trades, China as a major global demand centre and perishable logistics for Brazil as a major source of supply.

As a major exporting nation, Brazil poses equal logistical deficiencies and opportunities, said Marlene Arisa, Reefer Manager for DHL Global Forwarding. Over 86% of the country’s roads are unpaved, the rail network is limited, coastal shipping is restricted due to cabotage laws, ports are subject to congestion and delays, customs procedures are cumbersome and land transport from production centres to port can take up to 20 hours. Recently-passed national port reform laws, plus current investment in new facilities at Santos, the country’s largest port, are welcome developments, said  Arisa. However, much work remains to bring Brazil’s perishable logistics infrastructure and processes up to world-class standards.

“The depth and breadth of information and discussion at this year’s Cool Logistics Global was fantastic and we have received the best ever feedback from our attendees,” said Rachael White, Joint Managing Director at Cool Logistics Resources. “Port of Rotterdam was an excellent host and we also appreciated the support from the Dutch perishable shipper and reefer logistics communities. We are delighted to bring the show back to Rotterdam in 2014 and are already working on new ideas to further improve the content and format.”.
Source: Canadian Transportation & Logistics