Global Outlook

Unbelievably, it was only a couple of months ago that we were reporting price cuts in the cost of international refrigerated container shipping, as the markets struggled to recover. But the subsequent rebound in container shipping demand has been so rapid, that many in the industry have been caught off balance.

This has been exacerbated by the fact that container manufacturers cut production back so far over the last 18 months and are now struggling to catch up.

In fact, the container shortage is fast becoming so acute that in some, admittedly still rare, instances, actual rates have become a secondary concern for some shippers; continuity and reliability are often as important.

All of this means that container rates have reached a 20-year high and there are even well-founded rumours of container shortage surcharges. While rate rises and surcharges could create short-term antagonism, the situation may pave the way for more stable and successful partnerships between shippers and carriers.

On the other hand, some analysts feel that although the 'dark days' of 2009 are behind us, it's not back to business as usual just yet. These same analysts warn that the strong volumes currently being reported may be the result of a backlog made worse due to the container shortage which could result in demand weakening as the peak season progresses. And, given the continuing economic uncertainty in Europe, demand could also weaken if the overall market is negatively affected.

Yet it would appear that, increasingly, many carriers are now being driven more by profitability than simple market share. Ultimately, this shift in mentality will be good for everyone in the refrigerated meat sector: healthy ocean carriers are required for an efficient global supply chain.