Reefer market overview

1. Reefer market overview Trans-Pacific Maritime Conference Philip Damas Director, Drewry Supply Chain Advisors supplychains@drewry.co.uk Long Beach, March 5th, 2013

2. Resilient demand despite economic problems • Import patterns have changed in the past decade • Decline in specialised reefer fleet • Expansion of container reefer capacity • Increase in containerised market share • The $1,500/reefer 40ft GRI of January 2013 • Fewer options for shippers • Conclusions and Q&A • Agenda

3. Worldwide seaborne trade of perishable reefer cargoes increased by 4% in 2011 (numbers for 2012 not available, yet): Average historical of about 3% Some commodity sectors growing faster Not just a small market 1. Resilient demand despite economic problems Growth in seaborne reefer volumes vs global GDP Drewry forecasts continued growth of 4.5% a year in next few years: • Will there be sufficient capacity? Source: Drewry’sReefer Shipping Market Review & Forecast 2012/2013

4. 2. Import patterns have changed in the past decade Distribution of global trade in perishables by import region in 2001 Distribution of global trade in perishables by import region in 2011 Source: Drewry’sReefer Shipping Market Review & Forecast 2012/2013

5. Specialised reefer vessels being scrapped: 39 scrapped in 2011 74 scrapped in 2012 3. Decline in specialised reefer fleet Age profile of specialised reefer fleet for 100,000+ cft (no of vessels) Specialised reefer vessels’ age profile: • Ships are getting old • New ships delivered: zero! Source: Drewry’sReefer Shipping Market Review & Forecast 2012/2013

6. 10 years of decline for the specialised reefer fleet … progressively shrinking fleet 3. Decline in specialised reefer fleet (continued) The specialised reefer fleet (100,000+ cft) during 2001-2011 Source: Drewry’sReefer Shipping Market Review & Forecast 2012/2013

7. Global reefer container capacity is increasing: Up 8% in 2011 Estimated increase of 6% in 2012 4. Expansion of container reefer capacity Source: Drewry’sReefer Shipping Market Review & Forecast 2012/2013

8. Containers are winning the battle Container reefer fleet: Up to 91% of world reefer capacity and growing Specialised reefer fleet: Down to 9% of world reefer capacity – supply reduced 5. Increase in containerised market share

9. “Maersk Line Chief Executive Officer SorenSkou said Tuesday at a refrigerated logistics conference in Antwerp that his company plans to hike reefer rates by roughly 30% on a global basis from Jan 1, 2013.” 6. The $1,500/reefer 40ft GRI of January 2013 Drewry benchmarking of actual increase in reefer freight rates: • Varied considerably between routes, varied between carriers • Up to 33% increase between November 2011 and February 2013 Drewry reefer container freight rate benchmarks (Nov 2012=100)

10. Specialised reefer ships are full 7. Fewer options for shippers Box carriers less willing/able to invest Capacity bottleneck, repeat of January 2013 GRI? but… Major reefer shippers have huge negotiating power over shipping lines

11. 8. Conclusions • Worldwide seaborne trade of perishable reefer cargoes is a growing market • Import patterns have changed in the past decade • Very fast decline in the specialised reefer fleet • Expansion of the reefer containership fleet and box fleet • Containers now dominate reefer shipping • Impact of $1,500/FEU GRI What is to stop it happening again in future years?

12. Thank you. Any questions? Philip Damas damas@drewry.co.uk