Reefers or containers? The future of international shipping
Drewry maritime Research's Container Consensus suggests the same - "The maritime refrigerated container fleet grew by a record 13% during 2011 and ended the year at 2,048,000 teu. This was almost double the 6.6% increase achieved in 2010 and, in fact, one of the highest rates of annual growth ever reported for the sector."
In 2006 the world fleet of maritime refrigerated containers consisted of 1,377,000 containers. By 2011 this had reached 2,048,000, which gives some indication of the trend.
An article in the Financial Times recently explained how Fyffes had managed to make savings as a result of their doing just that. Sharon Cilliers of South African company, Goreefers, says this is no new thing.
"This has been happening for the past 8 years or so, it's just accelerated as the price of oil has risen," she said.
"With container shipping the per unit cost is so much cheaper than on a conventional reefer vessel. There needs to be 2,500 containers on board, as opposed to 3,000 pallets on a reefer vessel. There is no way to combat this and we've seen a number of reefer shippers shut down.
"10-12 years ago conventional shipping was big and containers were very small, now the situation is totally reversed."
However, there are signs that things might not be all doom and gloom as far as conventional shipping is concerned. Ole Schack Petersen, Global Head of Perishables at Damco, says there is still a place for break bulk reefer shipping.
"It all depends on the type of trade you are talking about and whether or not the ship is filled," he explains. "The economy of scale - particularly in relation to seasonal trade - often benefits the reefer vessels, as they can more easily swing in and out of seasons."
Ole confirms Sharon's comments however, saying, "What goes against this is, very often, container lines are utilising much more cargo as they are not only carrying reefer goods, but also non perishable products.
"Bananas are not seasonal, they are a year round product. If you consider trade in fruit from certain South American countries and, to a certain extent, South Africa, then there is a definite seasonal trade. As a result of this the reefer vessels run in parallel with the container ships, taking up the excess volume during peak times.
He says that the infrastructure in certain countries, for example, Argentina, is also more favourable to reefer vessels. Ole says he thinks there will always be a place for reefer vessels.
"I am definitely not a believer in things switching over 100%," he says. "The big challenge in this is that it is easier for investors to invest in containers than in standard reefer vessels. This is because the container ships are more adaptable as they can carry a wider range of cargo."
Despite this there are also signs that the pattern may show signs of a reversal. Siem Shipping, for example, has just chartered out four of its Star First series vessels to Fyffes for a further two years, with an option for further extensions.
John Rowland, Vice President of NYK Cool, certainly thinks there is a chance the tide will turn again.
"Over the last few years there has been a concerted effort by some container lines to increase their participation in major reefer routes - especially bananas from Central America to Europe and Russia.
"Very attractive rates were offered to lure cargo away from the traditional specialised reefer services and this proved quite successful in the beginning.
"However, more recently it can be seen that the rates offered by the lines are unsustainable and some major container carriers are making serious attempts to restore their reefer rates. If the rumoured rates increases are implemented it is very likely that there will no longer be cost advantages to container shipping."
John says some exporters are already returning to traditional freight services as a result of container routes becoming slower after adding extra port calls, not to mention slow steaming in a bid to reduce costs.
"Money is important," John says, "but for reefer commodities, so is a fast and reliable service."
"With perhaps a more level playing field," John concludes, "we may see the operators of specialised reefers clawing back some of the cargoes and trade lost to the container lines."