Shipping rates for refrigerated containers have returned to around pre-pandemic levels, according to William Duggan, North America advisor at New Jersey-based Eskesen Advisory, a boutique consulting firm that serves the refrigerated transportation sector.
While dry cargo rates have fallen sharply over the past year, it is a mistake to think that reefer rates have done the same since they never spiked to the same degree as the dry market during the COVID-19 container shipping crisis, Duggan told delegates at the recent National Fisheries Institute (NFI) Global Seafood Market Conference in Palm Springs last month.
“Rates overall on refrigerated business are at about pre-pandemic levels but that’s more of a tweak on the east and west bound,” Duggan said.
“North and south rates are pretty much over 2022. That’s because demand for space and equipment is still there and the supply demand ratios are in favor of holding the rate levels.”
The east-west refrigerated container market shipping seafood to Asian markets, including China for reprocessing, is completely different to that on north-south routes.
The United States, for example, gets most of its refrigerated imports in via north-south routes, posing implications for those shipping in shrimp from Ecuador and frozen Chilean salmon and frozen Brazilian tilapia.
Container rates more than quadrupled following the onset of the global COVID-19 pandemic, rising particularly steeply in 2021, but have since cooled significantly.
Following the onset of the pandemic in early 2020, the seafood and many other industries suffered from soaring shipping rates and reduced shipping options, battling for space aboard vessels.
The crisis began in early 2020 when containers became stranded where they were not needed due to congestion at ports sparked by COVID checks combined with spikes in demand for commodities and consumer goods, shipped particularly from China.
Last year, shipping sector analysts Drewry forecast modest declines through 2023 in its Reefer Shipping Annual Review and Forecast 2022/23 report.
Lower reefer charges come as the era of sharp increases in marine cargo insurance for seafood exporters largely slips into the past.
But while these rates may be falling, the main issue is on land, with the US food industry is facing a 10 percent shortfall in cold storage capacity at a time when refrigerated warehouse space is already tight and companies are struggling to shake off the after effects of the pandemic.
