The market is seeing increased demand for bookings ahead of peak season on most trades. At the same time, analysts expect container capacity to remain tight until at least October 2024.
For the reefer trade, the market stayed strong in the face of the new challenges.
Seaborne reefer shipments are forecast to grow by 1.6% in 2024 compared to last year. The total quantity is estimated to reach about 139 million tonnes by the end of 2024.
How is the capacity crunch impacting reefer shipping?
Despite the added vessel capacity this year, the Red Sea diversions are creating a critical market condition where the availability of containers is shrinking.
The available capacity in the specialised reefer fleet declined in this year’s first quarter. According to Drewry, the total number of operational vessels shrunk to 468 as of April 2024.
Regarding reefer equipment production, only 19,000 FEU were delivered in Q1 of 2024, a significant decrease from the 28,000 FEU produced in Q4 of 2023.
If equipment availability continues to tighten globally, this will negatively impact the availability and use of reefer containers.
Some carriers may employ reefer containers as non-operating reefers (NORs) to fulfil the demand for dry cargo.
A report by Reefer Trends revealed that capacity shortages in the Far East have already increased reefer rates and demand for reefer vessels.
In addition to the challenges posed by the current capacity crunch, the reefer trade continues to face issues in Panama, especially with a fruitful season in Central and South America.
However, the situation is improving, especially since the Panama Canal Authority anticipates improved rainfall in the upcoming weeks and has adjusted daily vessel transits and draft levels.
Nevertheless, the lack of positive development in the political situation in the Middle East continues to fuel more vessel diversions.
As carriers choose the journey around Africa to escape Houthi attacks, the impact on container availability, and thus reefer equipment availability, will remain uncertain.
