Eng

• Weighing the credibility of experts given their track record in the Covid crisis - and now slow steaming?

• Coping with the inevitable growth in reefers and a confused, inefficient lack of data sharing systems

• It is doubtful Northern Sea Route will amount to more than Northwest Passage did - which is to say, not much

• Another SOLAS update: Did revisions need to be done, or did bureaucratic activists need something to do?

Coping with the inevitable growth in reefers and a confused, inefficient lack of data sharing systems

One of the more promising developments in container shipping has been the widespread use of the reefer container. While there have been technological developments in this field over the last 20 years, more significant has been its sheer growth in popularity and their impacts in diversifying cold chains worldwide.

This has allowed the development of niche markets where there had been only mass markets before operated by those who could operate on the large scale, who made servants of smaller stakeholders who could not avail themselves of economies of scale.

This reduction in the primacy of the large scale wholesale market saw the fading away of bulk reefer ships as reefer containers took greater amounts of cold chain market share. This also allowed smaller players to refine their market to reach new customers profitably.

Much of reefer trade with Europe is done through Holland, which has long been famous for its tulips and its reefer-dependent cut flower trade.

So it is not surprising to find the Netherlands' news portal Fresh Plaza publish the thoughts of Rabobank, a Utrecht-based Dutch merchant bank with 89 branches and much experience in the reefer trade.

Rabobank starts off saying reefer containers have been around since the 1970s. By 2021, there were 3.5 million TEU of reefers worldwide, and today, this figure is expected to reach four million TEU in 2026.

Based on takeaways from the 2022 CoolTech conference in Rotterdam, Rabobank outlined three key topics that can help food and agribusiness (F&A) companies identify reefer opportunities.

One topic of great interest is the growing complexity and expense of environmental regulation related to real or imagined global warming. Like it or not, it is an issue much beloved of the media, academic, bureaucratic complex and must assume top priority in reefer research.

"If the reefer shipping industry is to be carbon neutral by 2040-2050, radical design changes that enable major reductions in energy consumption should already be implemented in the reefer manufacturing process in the next few years. In fact, reefer design has not significantly changed in the last 25 years. Insulation and coating show the most potential for efficiency improvement. Furthermore, switching to refrigerants with low global warming potential is desired, yet it should be carefully calculated, as such refrigerants are more flammable causing potential safety issues and less energy efficient compared to the high global warming potential counterparts." said Rabobank.

"Stakeholders in reefer logistics, including F&A shippers, container leasing companies, and ocean carriers, should encourage reefer manufacturers to invest in R&D for next-generation reefer designs," it said.

Another probem is equipment sourcing. This comes with challenges because the reefer manufacturing industry is consolidated, with the top four companies all based in China. They holding more than 90 per cent of the market. This puts them in control of innovation and development.

Although equipment customers role in development of reefer containers is limited, there are ways they can make better use of reefer containers in cold chains.

First, there is packaging. Taking fresh produce like fruits and vegetables as an example, corrugated fibreboard cartons or corrugated cardboard (CFC) and reusable plastic containers (RPC) are the most frequently used packaging materials.

"These two materials differ in terms of weight, recyclability, biodegradability, ease of handling, mechanical strength, and moisture control. When it comes to packaging design, parameters such as the total area of vents on packages, vent shapes, and vent positions determine how well cooling air can circulate around products and in the reefer container," said Rabobank.

These parameters, therefore, directly impact product quality and energy-saving opportunities. Reusable plastic containers can accommodate designs with numerous vents that may not be feasible. Nevertheless, the adoption of reusable plastic containers requires thorough planning of return logistics with regard to costs and environmental impact.

Besides packaging, the methods of stacking packages in reefer containers also have a great impact on airflow. For example, in palletised cargoes, cooling air is often not well distributed due to short circuits of airflow near the cooling unit. This creates heterogeneous (too cold or too hot) temperature zones inside reefer containers and consequently lowers product quality and shelf life. At the CoolTech conference, Otflow presented their innovative product – a floor cover for FEU reefer containers - which was the outcome of a collaboration with Wageningen Food & Biobased Research, said the Rabobank report.

"It is a minimal add-on in terms of costs and operation but can bring significant cooling energy savings, better food quality, and less food waste," it said.

Raboband points to other factors impeding progress - technology and standardisation. The two are related to cost sharing.

"Regarding standardisation, we see hardware with different technologies that do not communicate with each other. Moreover, most hardware-based companies develop their own siloed cloud platforms that are not interoperable or that require interfaces for linking with each other. Regarding cost-sharing, it is often the case that costs and benefits are not well distributed.

"For example, food exporters bear the costs of sensors and place them in product packages yet receive a limited benefit in return. Logistics service providers install monitoring systems to show that their services are correctly operated yet bear the risks when problems arise. Retailers, without making any investment, seem to receive the most benefit from quality, well-maintained products." said the Rabobank report.

To overcome data sharing challenges, the reefer logistics sector needs strong leadership from the ocean carriers, said the report. With high profits in 2020 and 2021, they have the necessary capital to invest in smart reefer containers and enough incentives to capture the data and sell customised data as ‘data-as-a-service’ to shippers.

Maersk’s Captain Peter service provides live reefer visibility (temperature, humidity, O2/CO2 levels) to shippers, is an example of this vision. Furthermore, with ambitions to grow towards providing end-to-end service provision, ocean carriers are in the right position to work with maritime and hinterland ports for investment in interoperable communication infrastructures.

Concluded Rabobank: "Reefer containers are not just giant metal boxes that demand no attention. Packaging and stacking in reefer logistics are examples of complex but important aspects that contribute to a reduction of costs.

U.S. Trade Specialists