2024 reefer sector starts strong, expected to maintain growth: Drewry
GLOBAL – The reefer sector has begun 2024 on a strong note, buoyed by healthy crops in the Southern Hemisphere according to Drewry’s latest Reefer Shipping Forecaster.
This positive trend is expected to continue throughout the year, marking a return to growth for the sector after two years of declines.
Drewry’s report highlights the positive impact of good growing seasons on exports. “Good growing seasons have supported improved deciduous exports so far this year,” the report states.
South Africa’s citrus season is anticipated to boost growth further, with new orchards coming into production and favorable conditions benefiting orange, lemon, and grapefruit exports.
Similarly, New Zealand’s kiwi export volumes are expected to rise significantly later in the year, despite a slow start.
Meat and banana exports, major components of the seaborne reefer trade, also began the year with positive momentum, showing single-digit growth compared to last year.
The overall increase in key commodity exports is complemented by falling reefer freight rates as shipping lines continue to lower prices after pandemic-era disruptions.
Reefer freight rates, which had risen slightly in the first quarter of 2024 due to concerns about the Middle Eastern conflict, are now expected to decrease.
This decline is attributed to excess capacity in the container segment, which helps offset any rerouting needed around the Red Sea.
Drewry’s report suggests that the combination of improving exports and declining freight rates will shape the sector’s outlook for the rest of the year, predicting an overall increase in worldwide seaborne reefer volumes by more than one percent year-on-year in 2024.
Hapag-Lloyd Q1 2024 profit drops 84% amid weak freight rates
Meanwhile in another parallel development, Hapag-Lloyd has reported a significant decline in profits for the first quarter of 2024, attributed to weak freight rates.
The company’s profit fell 84 percent to USD 325 million, while group revenue decreased by 24 percent to USD 4.7 billion.
EBIT dropped to USD 396 million, with the average freight rate declining by 32 percent to USD 1,359 per TEU compared to USD 1,999 in Q1 2023.
Despite the revenue drop, transport volumes increased by 6.8 percent to three million TEU. “Although costs rose significantly due to the rerouting of ships around the Cape of Good Hope, these were largely offset by active cost management,” the company stated.
Revenue in the Terminal & Infrastructure segment reached USD 107 million, with an EBITDA of USD 35 million and an EBIT of USD 18 million.
CEO Rolf Habben Jansen commented on the results, noting the challenges faced due to the normalization of supply chains. “Even though our results are significantly below the exceptionally strong figures from the previous year, we are pleased to have got the new year off to a good start,” he said.
Jansen emphasized the importance of cost management and the continued implementation of the company’s Strategy 2030, focusing on decarbonization initiatives and maintaining quality for customers.
Looking ahead, Hapag-Lloyd expects to close 2024 with a group EBITDA between USD 2.2 billion and USD 3.3 billion, and a group EBIT ranging from USD 0 to USD 1.1 billion.
The company acknowledges the high degree of uncertainty due to volatile freight rates and geopolitical challenges. Additionally, Hapag-Lloyd and Maersk have announced a new long-term operational partnership, Gemini Cooperation, set to begin in February 2025.
This partnership will see Hapag-Lloyd leaving THE Alliance in January 2025, aligning with Maersk and MSC’s earlier decision to terminate the 2M Alliance in January 2025.
As of March 31, 2024, Hapag-Lloyd’s fleet comprised 280 container ships with a transport capacity of 2.1 million TEU, employing a total of 16,576 people.
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2024 reefer sector starts strong, expected to maintain growth: Drewry
GLOBAL – The reefer sector has begun 2024 on a strong note, buoyed by healthy crops in the Southern Hemisphere according to Drewry’s latest Reefer Shipping Forecaster.
This positive trend is expected to continue throughout the year, marking a return to growth for the sector after two years of declines.
Drewry’s report highlights the positive impact of good growing seasons on exports. “Good growing seasons have supported improved deciduous exports so far this year,” the report states.
South Africa’s citrus season is anticipated to boost growth further, with new orchards coming into production and favorable conditions benefiting orange, lemon, and grapefruit exports.
Similarly, New Zealand’s kiwi export volumes are expected to rise significantly later in the year, despite a slow start.
Meat and banana exports, major components of the seaborne reefer trade, also began the year with positive momentum, showing single-digit growth compared to last year.
The overall increase in key commodity exports is complemented by falling reefer freight rates as shipping lines continue to lower prices after pandemic-era disruptions.
Reefer freight rates, which had risen slightly in the first quarter of 2024 due to concerns about the Middle Eastern conflict, are now expected to decrease.
This decline is attributed to excess capacity in the container segment, which helps offset any rerouting needed around the Red Sea.
Drewry’s report suggests that the combination of improving exports and declining freight rates will shape the sector’s outlook for the rest of the year, predicting an overall increase in worldwide seaborne reefer volumes by more than one percent year-on-year in 2024.
Hapag-Lloyd Q1 2024 profit drops 84% amid weak freight rates
Meanwhile in another parallel development, Hapag-Lloyd has reported a significant decline in profits for the first quarter of 2024, attributed to weak freight rates.
The company’s profit fell 84 percent to USD 325 million, while group revenue decreased by 24 percent to USD 4.7 billion.
EBIT dropped to USD 396 million, with the average freight rate declining by 32 percent to USD 1,359 per TEU compared to USD 1,999 in Q1 2023.
Despite the revenue drop, transport volumes increased by 6.8 percent to three million TEU. “Although costs rose significantly due to the rerouting of ships around the Cape of Good Hope, these were largely offset by active cost management,” the company stated.
Revenue in the Terminal & Infrastructure segment reached USD 107 million, with an EBITDA of USD 35 million and an EBIT of USD 18 million.
CEO Rolf Habben Jansen commented on the results, noting the challenges faced due to the normalization of supply chains. “Even though our results are significantly below the exceptionally strong figures from the previous year, we are pleased to have got the new year off to a good start,” he said.
Jansen emphasized the importance of cost management and the continued implementation of the company’s Strategy 2030, focusing on decarbonization initiatives and maintaining quality for customers.
Looking ahead, Hapag-Lloyd expects to close 2024 with a group EBITDA between USD 2.2 billion and USD 3.3 billion, and a group EBIT ranging from USD 0 to USD 1.1 billion.
The company acknowledges the high degree of uncertainty due to volatile freight rates and geopolitical challenges. Additionally, Hapag-Lloyd and Maersk have announced a new long-term operational partnership, Gemini Cooperation, set to begin in February 2025.
This partnership will see Hapag-Lloyd leaving THE Alliance in January 2025, aligning with Maersk and MSC’s earlier decision to terminate the 2M Alliance in January 2025.
As of March 31, 2024, Hapag-Lloyd’s fleet comprised 280 container ships with a transport capacity of 2.1 million TEU, employing a total of 16,576 people.
For all the latest fresh produce industry news updates from Africa, the Middle East, and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook, and subscribe to our YouTube channel.