Dymanar launched its 2019 Reefer Analysis presenting how the landscape of the reefer field evolved, given that 2019 was a full year; Increased trade tensions followed by sanctions, the IMO’s 2020 sulphur cap which approaches in less than a week and how it may affect the reefer sectors and the slowing economy which affected the trade flows.
According to Dynamar, the trend of reefer shipping switching from conventional reefers ships to containers continued. Many where the reefer companies who opted for container voyages.
The report also comments on the old vessels the companies use, which will face the challenges of switching to alternative fuels; Given that conventional fruit transport becomes more and more an activity of the specialised reefer carriers, the old vessels may have to be sent to scrapyards.
Although there was relatively modest scrapping in 2019, one would not be surprised when in the coming months the queues for the Indian beaches will start swelling. A recent order from Fresh Carriers for three new large ships will hardly be enough to compensate for this development.
In addition, smaller conventional ships, which are involved in the meat or fish trade, focus on changing from port-port transport to collecting the fish from the fishing vessel at sea and bringing it on land.
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Dynamar commented that 2019 was “remarkably quiet”. However, the US trade war and the sanctions along with economies cooling down led to volumes growing unpredictably. One moment, preceding another sanctions deadline, volumes went up fast, to reduce at an even higher speed when the same deadline was postponed again.
Concerning box carriers, the market faced a great number of ships being taken out of service due to scrubber retrofits, making the number of available units for the charter market low. Also, freight rates in the second half of the year were substantially lower than in the same period a year earlier.
In light of the approaching IMO 2020 Sulphur cap, in order to recover the expenses, there is about USD 250 per ton difference between Heavy Fuel Oil (HFO) and Very Low Sulphur Fuel Oil (VLSFO), carriers started announcing the various low sulphur surcharges.
Thus, Dynamar raises the question “will these eventually be high enough for the cost difference or will they trigger another round of reorganisations and demolitions?”
In contrast to the conventional reefer market, containerships are much more fuel efficient and mass scrapping is less likely. Regardless, time will tell and 2020 is likely to become an interesting year.
To explore more on the “2019 Reefer Analysis” click here.
