Shipping lines are boosting their reefer capacity with orders of thousands of new containers over the last few months, as demand for temperature-sensitive and perishable cargo continues to mount.
Ocean Network Express (ONE) expanded its current refrigerated container fleet by adding another 27,500 new units to meet the growing demand for refrigerated cargo around the world.
It said this new investment comes on the heels of another 5,000 units (all 40’HC) it invested on in early 2020,demonstrating its strong commitment to meet the demand for containerized reefer trade.
Liners boost reefer capacity
ONE noted that despite the challenges triggered by Covid-19, the global refrigerated container trade showed strong resilience in 2020 and it “expects this growth to be maintained in 2021.”
“ONE has been consistently investing in new reefer containers, which in turn has helped to position ourselves in a strategically important & growing business segment," said Hiroki Tsujii, the Singapore-based managing director for marketing and commercial at ONE, noting that the liner has “one of the largest and youngest reefer fleets in the world.”
Hong Kong-headquartered container shipping company OOCL told Asia Cargo News that it is also beefing up its reefer container fleet, with strong growth expectations for the segment.
“To meet the evolving needs of our customers, OOCL has procured a few thousand units of new refrigerated equipment to expand our reefer fleet in 2021,” Kalia Wong, a senior corporate communications officer at OOCL, told Asia Cargo News.
“We continue to see the reefer market being relatively strong and we hold a positive outlook for this sector, especially on the Asia-Europe and Asia-U.S. trade lanes,” she added.
Hong Kong as major reefer hub
As Asian shipping firms add more refrigerated containers, Hong Kong – one of the busiest port centers in the region – is also positioning itself as a major reefer cargo hub, citing its strategic location and its infrastructure readily available to support cold chain logistics.
A representative from the Hong Kong Seaport Alliance (HKSPA) told Asia Cargo News that it has developed a “world-class reputation” in handling fresh fruits destined for mainland China and across the region with its wide shipping connectivity as well as ready infrastructure to support the needs of the industry.
“HKSPA’s competitive advantage is that it has the highest vessel call frequency covering intra-Asia, Latin America and Oceania into South China, which means that fruit shippers and consignees have multiple shipping options to ensure their perishable cargo is delivered on-time in its best condition,” the representative said. HKSPA is a joint venture between Modern Terminals Limited (MTL) and HPHT on behalf of Hong Kong International Terminals (HIT), COSCO-HIT Terminals (CHT) and Asia Container Terminals (ACT).
In addition, HKSPA cited the city’s multi-modal connectivity via truck and barge, which could cater to various delivery needs in the cold chain sector.
The port of Hong Kong currently deploys over 8,000 reefer points, surpassing all other terminals in the South China region, and handles 900,000 TEU of reefers annually. Its container handling capacity is also “twice that of any terminal in the region,” boosting the city’s position in the cold chain logistics industry.
“There are real competitive advantages as HKSPA’s efficiency means the fruits arrive in the market at least two days earlier, when compared to other South China ports and allows the traders to sell their fruit at a higher price, as the produce is fresher,” HKSPA said in its statement.
In terms of assets and resources, the port of Hong Kong had a combined throughput of 15 million TEUs in 2020, and operates 23 berths and 12 barge berths on 262 hectares of land.
The representative noted that with over 220 weekly liner calls to the free port of Hong Kong, there are also “no barriers to trade,” which means that perishable cargo such as fruit can move quickly and efficiently to end markets.
“To embrace the opportunity and capture this phenomenal growth, HKSPA is well prepared and is the only established hub in Asia with the resources, assets and transportation connectivity to ensure and secure time sensitive cold chain services that the fruit industry demands,” HKSPA added.
Growing fresh fruit market in China
The group of terminal operators noted that Hong Kong is the largest fresh fruit trading hub in South China, with 60% of the imported fruit re-exported to mainland China.
Last March, HKSPA said that it continued to capture the strong growth in the cold chain market with the port recording “over 50% growth” in the volume of cherries it handled from South America alone, a record high volume of the fruit handled in Hong Kong for the mainland China market from Chilean exporters and South China importers.
Mainland Chinese consumers account for over 70% of cherries in the world market; 90% are from Chile, the largest supplier of fruits imported by China.
Maritime research consultancy Drewry said earlier that shipment of exotic fruits such as cherries, durian, persimmons and avocado, are seen to boost reefer trade in the coming years as technology evolves allowing transport of these sensitive commodities to more markets at longer distances.
Drewry also forecasts that seaborne reefer traffic will reach 156 tonnes by 2024, representing an average annual growth of 3.7% — faster than the expected growth in the wider dry cargo trade.
“Growth in reefer shipping trade has been largely driven by soaring demand for proteins, but this trend is expected to recede as domestic pig stocks [in China] recover,” Drewry said. “Future growth is expected to come from accelerating trade in exotic fruits, thanks to new technology which is lengthening potential shipping distances and opening up new markets where discretionary spend is rising.”
Meanwhile, to support the port of Hong Kong’s efforts to capture the growth in the reefer cargo market, HIT announced the launch of a remote reefer container monitoring system that establishes a 24x7 automated remote management for refrigerated containers, allowing greater visibility and accuracy on container conditions such as temperature, humidity and CO2 level.
“The system itself is our investment in helping the terminals capture opportunities in the cold chain logistics market, as growing demand for temperature-controlled goods continues to drive global expansion in the cold chain,” Leonard Fung, managing director of HIT - Hutchison Ports in Hong Kong, told Asia Cargo News.
“It is important that the port and transportation infrastructure and expertise are available, particularly when serving Asia, the largest import region for perishables in the world,” he added.
The Hutchison Ports executive noted that a similar kind of remote reefer system is also currently in use in other ports of the group, including at ECT Rotterdam and Karachi.
“Depending on the cold chain market opportunities, we plan to roll this out to other locations as and when necessary,” Fung added.
According to marketandmarkets.com, the global cold chain market size was valued at US$233.8 billion in 2020, and is projected to reach US$340.3 billion by 2025, with a CAGR of 7.8% — and the Asia-Pacific region is projected to grow at the highest CAGR during the forecast period.
HIT said earlier that fresh produce worth more than US$3 billion arrives in Hong Kong annually.
Charlee C. Delavin
