Reefer Freight Rates Hit Historic High

Maritime research and consulting services company Drewry recently released its latest Reefer Container Freight Rate Index, revealing an increase in reefer freight rates by 26% in the first quarter of 2021 owing to seasonal changes and rising oil prices.

The Reefer Index, a weighted average of reefer freight rates, is calculated by compiling statistics from the 15 busiest global reefer shipping lanes. During the first quarter of 2021, the average global reefer freight rate hit the highest levels since records were first kept in 2017. These figures are forecast to continue rising during the second quarter of 2021. However, the increase in reefer rates appears relatively moderate compared to the explosive rise in dry container freight rates.

Why Are Rates Increasing?

According to Philip Gray, Drewry’s head of reefer shipping research, reefer rates have been increasing as a result of shortages in equipment availability and slot capacity. Because the reefer industry is still recovering, it has been difficult to compete with dry cargo traffic, which pays more. Gray went on to say that despite reefer production hitting record levels during early 2021, equipment supply will likely remain limited over the next few years.

The demand for specialized reefer ships has increased dramatically, with time charter equivalents rising to their strongest levels in over a decade. Drewry predicts that the 20-year decline in reefer fleet sizes will finally change this year. However, the downward trend will likely resume not long after.

Total reefer traffic fell to 130 million metric tons in 2020, a decrease of 0.4%. This year, however, Drewry expects reefer traffic to recover by 2.7%, before eventually hitting an average annual growth rate of 4%.

Image: Pexels

This article was translated from Chinese. Read the original article.