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COOL CARGOES Market trends and issues for BCOs shipping refrigerated products Philip Damas, Head of Logistics Practice, Drewry PRIVATE & CONFIDENTIAL TransPacific Maritime conference www.drewry.co.uk February 27, 2017 Drewry Our


  1. COOL CARGOES Market trends and issues for BCOs shipping refrigerated products Philip Damas, Head of Logistics Practice, Drewry PRIVATE & CONFIDENTIAL TransPacific Maritime conference www.drewry.co.uk February 27, 2017

  2. Drewry Our research provides the Our Maritime Advisors offer We focus on advising users Combining our market- robust analysis and a wealth of experience of international multi-modal leading resources with balanced opinion those across the maritime sectors transport services, taking our seasoned sector expertise within shipping, finance and and lead the industry in extensive understanding of and commercial awareness logistics need to make their respective areas of the industry and applying it to we are now able to offer a informed business specialisation. Our sector all stages of the supply highly differentiated and decisions. expertise covers; ports, bulk chain. comprehensive Investment shipping, liner shipping, Research Service to The range of titles and Through our supply chain shipyards, ferry and RoRo, prospective investors in reports we publish keep our research catalogue and technical ship management. publically listed maritime clients up to date on every industry knowledge, we offer and shipping companies. key maritime sector, from Our combination of deep a range of procurement dry bulk to chemicals and sector understanding, support services that Our service covers a range from LPG to ferries, with technical expertise and empower importers and of report formats, detailed analysis and market leading exporters, providing them supporting resources and insightful commentary on with the tools, resources and sector orientated webinars insight enables us to be past, present and future tailored advice they need to aimed at providing our confident in our actions and sector performance. more effectively manage clients with the most ability to deliver the right their transport service complete picture of the results for our clients. provider and international organisations under supply chains. coverage as is possible.

  3. By 2020, seaborne refrigerated traffic will reach 120 million metric tonnes A FEW TRENDS Drewry forecasts global perishable reefer trade (seaborne part) to reach 120 million metric tonnes by 2020 Slower growth in 2015/16 …but still growth Top 2 volume products: bananas and meat Source: Drewry Reefer Shipping Market Review and Forecast – Annual Banana trade still growing by 2% a year… Report 2016/17 High-growth products: exotic fruit, pharma TPM conference – cool cargoes trends and issues for BCOs

  4. Why demand for seaborne refrigerated products keeps growing 1. Population growth – demand for perishable food products 2. Changes in eating habits, green credentials 3. Non-traditional seaborne refrigerated products eg confectionery and pharma 4. Modal shift from air freight to seafreight eg pharma TPM conference – cool cargoes trends and issues for BCOs

  5. Asia including Middle East is where big reefer container volumes go Source: Drewry Reefer Shipping Market Review and Forecast – Annual Report 2016/17 TPM conference – cool cargoes trends and issues for BCOs

  6. As traffic volumes grow, the number of ocean carriers shrinks CARRIERS' REEFER CONTAINER MARKET SHARES Maersk & Hamburg 4 of the top 6 reefer carriers Sud engaged in acquisitions/mergers; CMA CGM & APL Previous market share carrier base loses 7 major Hapag-Lloyd & UASC Additional market providers in just 2 years share Mitsui OSK & 3J 0% 10% 20% 30% Maersk & Hamburg Sud Major structural change in carrier Mediterranean concentration; Shipping CMA CGM & APL top 6 carriers to control 3/4 of global reefer box market Hapag-Lloyd & UASC 3J COSCO Others Source: Drewry Supply Chain Advisors TPM conference – cool cargoes trends and issues for BCOs 6 www.drewry.co.uk

  7. Key issues for BCOs shipping refrigerated products Costs “Due to gradual improvements in container Freight rate increases rates, Maersk Line expects an improvement in Modal shift from air to sea excess of US$1 billion in underlying profit Rate volatility; no benchmarking of freight rates compared to 2016.” Risk and performance Growing demand Asian Business News South Korea’s Hanjin Shipping Risk mitigation with fewer alliances Files for U.S. Bankruptcy & avoiding another Hanjin – risk mitigation Protection Securing capacity / fewer specialised reefer options Bigger ships and port delays & reliability (new alliance phasing) Supplier negotiation strategy Adapt supplier and negotiation strategy to more concentrated carrier base e-sourcing technology to identify optimisation of bids TPM conference – cool cargoes trends and issues for BCOs 7 www.drewry.co.uk

  8. Conclusions  Demand for seaborne refrigerated products keeps growing  Some non-traditional products now using ocean reefer containers  Soon 120 million metric tonnes/year global traffic  Asia including Middle East - big market for reefer products  The number of major reefer container carriers more concentrated  Big issues for BCOs concerning… Costs… Risk and performance… Supplier negotiation strategy TPM conference – cool cargoes trends and issues for BCOs 8 www.drewry.co.uk

  9. Thank you Philip Damas, Director – Head of Logistics Practice damas@drewry.co.uk www.drewry.co.uk UK INDIA SINGAPORE CHINA 15-17 Christopher Street 209 Vipul Square #13-02 Tower Fifteen Office 555, 4th floor London Sushant Lok - 1 15 Hoe Chiang Road Standard Chartered Tower EC2A 2BS Gurgaon 122002 Singapore 089316 201 Shi Ji Avenue United Kingdom India Pudong District, Shanghai China, 200120 T +44 20 7538 0191 T +91 124 497 4979 T +65 6220 9890 T +86 (0) 21 6182 6759

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