Sunday , 17 February 2019
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Dynamar: Reefer capacity to fall due to sulphur regulations

Shipping consultant Dynamar has predicted that a lot of old conventional reefer ships will be scrapped to comply with upcoming sulphur regulations while investment in the reefer container segment has increased.

As a result of the reduction in trade capacity, Dynamar expects that both conventional reefer operators and container ship operators will receive a boost, for a time at least, which will offset new higher fuel costs.

The cost of fuel makes up a larger part of the costs for conventional reefer operators which is why Dynamar expects operators to scrap “fuel-hungry” old ships or even exit the industry all together.

For struggling ship operators preparing for the implementation of the International Maritime Organisation (IMO)’s 2020 sulphur cap, scrapping may prove be the most cost-effective method as the use of LNG or scrubbers will be too expensive.

As the decline in the conventional reefer fleet persists, with 19 ships with an average age of of 33 years demolished in the first half of 2018, Dynamar expects the fleet to fall from the current 574 ships to around 310 by 2030.

On the other hand, the consultant found that in 2018 there appeared to be a preference for the reefer container segment as there was a growth in new developments and investment.

At the end of 2018, the world maritime container box fleet totalled 2.9m teu and production was projected to grow 12% to 130,000 teu and for 2019 it is expected to rise but only slightly.

Maersk Line and its subsidiary Hamburg Süd launched a new reefer-heavy service in 2018 between Costa Rica and Italy, which deploys five 1,800 teu ships equipped with 450 reefer plugs.

However, Maersk Container Industry (MCI) closed its reefer factory in San Antonio, Chile after just three years which left it with only one facility in Qingdao, China.

Seatrade replaced containerships deployed on its North Europe-Central America Blue Stream service with specialised reefer tonnage and on-deck box capacity between 260 and 440 teu.

Great White Fleet terminated its slot allocation on the Central America Express service of MSC, which connects Central America with the US.

Instead, the shipping arm of fruit trader Chiquita will offer two new services, deploying high-reefer capacity tonnage and in 2018 it ordered 2,500 Star Cool integrated reefer containers.