Global Outlook

- Published: 11 June, 2010

Officially, 'extra-slow-steaming' (ESS) is the shipping industry's response to cutting global carbon emissions and is supposed to cut vessel emissions by some 30%. It is now the norm on the majority of trade routes, although the cynic would say that it is simply a significant cost-cutting exercise, keeps ships in employment and, in fact, was widely used just to redress the supply-demand imbalance that built up in 2009. It is estimated that, in May alone, speed cuts to between 17-19 knots from the usual 23-25 kept almost 100 ships in employment.

Of course, the knock-on effect for importers and exporters is that it also adds a few days to transit times. For reefer (refrigerated) container shipping which is crucial to the meat industry this is of even more importance as, for chilled rather than frozen goods, every extra day in transit is important. In addition, reefer containers are in shorter supply than their more traditional counterparts and are more complex to operate two points that make reefer containerisation more expensive in the first place.

With regard to container charter rates, some analysts are predicting that pricing will remain firm and others are suggesting that a weaker euro, fears of a double-dip recession and the eagerness of carriers to boost revenue could push freight rates down. However, it will take a while for the impact of a weaker euro to be felt and, because of the way cargo is booked, there is always a delay of about three months, so cargo loaded this month and next is already contracted.

All of this means that reefer freight rates remain unpredictable so, with this in mind, it is even more crucial that you mitigate any possible negative fall-out by ensuring that your freighting partner offers you 'real-time' tracking and optimum freight management.

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Global Outlook

The Online Meat Trades Journal