By Phil Hastings

Shippers of ocean reefer containers look set to be hit by a double-whammy of rising costs over the next year. Industry sources expect rising volumes and anticipated capacity/equipment shortages to help shipping lines push up their general rates for reefer boxes.More immediately, they believe other lines are likely to follow the example of CMA CGM in implementing "reefer consumption surcharges".

Explaining the background to those developments, Ben Hackett, principal of US-based international trade and logistics consultancy Hackett Associates told the Hamburg conference the volume decline in reefer traffic over the last year had been only marginal. "Even the freight rates for that traffic held up for a fairly long time although over the last six months they too have gone south," he said.

Claus Peter Ellemann-Jensen, CMA CGM's vice- president for reefer trade, said the global container shipping industry as a whole was definitely seeing some increases in freight rates, particularly out of Asia.
"Stability in dry freight rates will bring back stability in reefer trade rates," he argued.

Meanwhile, shippers and forwarders of reefer boxes face having to pay another type of shipping line surcharge, this time relating to the additional fuel used to control the temperatures of containers while they are on board vessels.

CMA CGA announced last month that together with affiliates Delmas, MacAndrews, ANL, US Lines and Cheng Lie, it planned to implement such a charge in all trades from October 1, with the exception of US inbound and outbound trades where the scheduled start date was October 16.

When the new surcharge was announced, Ellemann-Jensen said: "The electricity used for reefers aboard container vessels means extra fuel consumption, thus extra cost for both shippers and carriers. With this reefer consumption surcharge, CMA CGM and affiliates will provide customers with a more transparent and balanced segregation of costs."The reefer consumption surcharge would be revised on a monthly basis, together with its general BAF (bunker adjustment factor) levels.

Commenting on the surcharge at the conference, Ellemann-Jensen pointed out that some shipping lines already had different BAFs for reefer containers than for dry freight boxes. He described CMA CGM's planned reefer consumption surcharge as "an initiative".

"We will see how it flies throughout the fourth quarter and whether the industry supports it," he added.
Asked what the level of surcharges would be, he said the minimum would be US$25 per TEU and the maximum around $100 per TEU, with the latter applying in the Australia/New Zealand-Europe trade, which had the longest routes.

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