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Demand for Refrigerated Containers Heats Up

“Summer time and the livin’ is easy…..” well, it can be if your temperature-sensitive cargo is transported correctly. Otherwise, that shipment of meat or fruit could turn into something rotten. Global demand for refrigerated containers is heating up. According to Drewry, industry demand for refrigerated transport is expected to increase by 17 percent over the next three years.

Increased Demand for Reefer ContainersThe volume of food imported into the United States continues to climb and the number of foreign manufacturing facilities registered to sell foodstuffs in the United States has outpaced the total number of domestic facilities. It is no surprise that shippers must emphasize food safety in their supply chain. Recent advances in shipping container technology will help to ensure that you have options when it comes to protecting your perishable cargo. 

Technology Keeping Pace

There have been recent improvements in both refrigerated container hardware and software systems. Hardware and software work together to maintain temperature during transit as well as monitor the status of the container using radio-frequency technology and long-range satellite communications. Several companies have introduced different versions of the new, high-tech units. These new “smart” containers can report problems such as temperature deviation or even shocks from improper handling.

A Cool Investment

New refrigerated containers aren’t cheap. The average cost of a 40-foot reefer container is $30,000, compared to just $5,000 for a standard 40-foot unit. However, because of increased demand and a forecast that shows the trend will likely continue, carriers are willing to make the investment in new equipment. After all, newer reefer units are more energy efficient, quieter and more compliant with environmental regulations. It becomes a matter of carriers taking the long-view of investing now so they will remain competitive later. Incidentally, there is also a market for used refrigerated containers. Many industries have discovered that second-hand reefers make excellent, low-cost cold storage space.

The rise in volume of refrigerated cargo means increased competition between vessels offering slots for refrigerated containers and specialized refrigerated carriers. Even though containerized reefer demand still outpaces the specialized carrier segment, reefer carriers are not sitting idly by. For example, Seatrade has announced they have ordered two new 2,200 TEU capacity vessels and initiated programs promising faster transit times.

A specialized reefer vessel, the Reefer RoRo will be built especially for shipping bananas and roll on roll off cargo from Central America to Europe. In addition to general cargo, the hybrid vessel will boast the capacity to load 1,000 automobiles for Central American markets. Bananas bound for northern Europe will make up the back haul.

The investment is significant, but the motivation is the same. According to Birger Lindberg Skov, of Reefer Intel AG , “Let me be straight, there is only one reason these ships will be built, and that is the cost reduction compared to the competitors’ vessels,” Skov said. “This vessel has a cost reduction of about one U.S. dollar to $1.25 per banana carton, equivalent to an overall price reduction of roughly 35 percent. Four Reefer RoRo vessels can contribute to a yearly cost reduction of about $45 million directly to the bottom line.” 

Smart refrigerated containers and new specialized ships reflect just how globalized our food chain has become. Everything from pharmaceuticals to fresh flowers and foodstuffs of all kinds are in transit around the world every day. And if necessity is said to be the mother of invention – we may add that the demands of consumers certainly play a vital part. We have all come to expect the incredible array of produce and other items at the local supermarket. Consider that the next time you peel a banana.

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