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OCEAN REEFER MARKET UPDATE

GLOBAL REEFER COMPETENCY CENTER

November 2021
DHL Global Forwarding – Excellence. Simply delivered.
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Contents
Ocean Freight Reefer Market update – November 2021

1 Topic of the month

Where are all the Reefer’s gone?

2 High level development

3 Market outlook

4 Reefer Capacity

5 Economic outlook & demand development

6 Did you know?

Inside Components and Functionality of a Reefer Container

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Topic of the month – Where are all the Reefers gone?

A lot of people are asking us where all the Reefer
equipment is and a (not so simple) answer is: in Asia!

Then why it is so difficult to ship Reefer from Asia and

why is the Reefer market out of Asia dropping so much
this year?

Actually the answer is straight forward, a lot Supplier

of food can’t afford prices like Retail or Tech clients
and therefore currently Dry cargo is preferred by
shipping lines.

Something to think about for all of us – what does

this do to our lives?

Source: DHL, Drewry

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High level market development

ECONOMIC OUTLOOK GDP GROWTH BY REGION1)
CAGR
2021F 2022F 2023F 2024F 2025F
(2022-25)
AMER 6.0% 4.2% 2.3% 2.4% 2.4% 2.4%

ASPA 6.1% 4.9% 4.4% 4.3% 4.3% 4.3%

EURO 5.1% 4.2% 2.2% 1.8% 1.7% 1.9%

MEA 3.6% 4.4% 4.3% 3.8% 3.5% 3.8%

DGF World 5.7% 4.5% 3.2% 3.0% 3.0% 3.1%

DREWRY Global Reefer Index2) BUNKER PRICES3)

1) Real GDP, Copyright © IHS Markit, Q2 2021 Update 1 Jun ‘21, Venezuela is excluded from aggregates due to hyperinflation. All rights reserved;
2) Drewry, in USD/40ft container, including BAF & THC both ends, routes,
3) Source: DHL

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Major trades – Market outlook October 2021 month-on-month development (1/2)

EUROPE NORTH AMERICA

Import region Capacity Rate Import region Capacity Rate

AMNO = = EURO = +

AMLA & MX = ++ AMLA - ++

ASPA = + ASPA - ++

MENAT - =/+ MENAT - +

SSA = + SSA = +

ASIA PACIFIC SOUTH AMERICA

Import region Capacity Rates
Import region Capacity Rates
EURO = ++
EURO - +
AMNO - ++
AMNO - +
ASPA = ++
AAMLA = +
MENAT = +
MENAT - =
SSA = +
OCEANIA - +

Source: DHL
KEY Strong Increase ++ Moderate Increase + No Change = Moderate Decline - Strong Decline --

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Major trades – Market outlook October 2021 month-on-month development (2/2)

TURKEY MEA EAST MED & NORTHWEST AFRICA

Import region Capacity Rate Import region Capacity Rate
AMNO - + AMNO = ++
AMLA & MX -- ++ AMLA & MX = +
ASPA + = ASPA = ++
MENAT + = MENAT - ++
SSA = = SSA = +

Source: DHL
KEY Strong Increase ++ Moderate Increase + No Change = Moderate Decline - Strong Decline --

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Balanced

Market Update, November 2021 - Overview Reefer Equipment Situation Tight

Deficit

> North Europe –Tight

> South Europe – Tight
> HK & CN – Tight at Xiamen, Tianjin, Ningbo and Shenzhen > UK and Nordics – Tight to Deficit
> North Asia (KR & JP) – Overall balanced, > Turkey – 40’ Reefer Balanced, 20’ Reefer Balanced
> South East Asia – Tight at PH
> North America WC (YVR/SEA/TIW/OAK) – Deficit
> India – Tight in India > Southern Africa – Deficit
> North America WC (LAX) - Balanced
> East & West Africa – Tight
> North America EC - Tight
> Morocco – Balanced
> Latin America WC - Deficit
> Egypt– Tight, trending to Deficit
> Latin America EC - Deficit
Source: DHL, Shipping Lines
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Market Update, November 2021 - Europe Exports by Trade

To North America To South America To Asia Pacific

Rates to East-Coast US are stable on high
levels.
West-Coast congestion is not improving at all.
Developments are hard to foresee.
For Canada East-Coast, rates are stable with a
tendency to possibly reduce slightly due to
improving water levels in the Saint Laurent.
South America is possibly the worst
market right know.
Vessels are shock-a-block full and this leads to
massive increases on both coasts with no
improvement foreseen in the upcoming
months, as this is rather supported with the bad
equipment situation.
While we have seen a stabilization in
the last month on rate levels, we rather see
slight rate increases again. Especially due to
very difficult equipment flows, carrier are not to
interested and we already see a booking stop
towards Asia for Reefer from one big carrier.
Space, meanwhile is not a big issue.
Oceania remains critical, with full vessels and
limited capacity. Rate level seem to reach their
peak though.

Equipment situation in Europe (North and South) is remaining on “okay” levels.

While we are far away from having sufficient equipment supply and being able to provide something on short notice (especially bigger lots), we also do
not see bigger issues on equipment as long as we keep the proper booking flow etc. in place.

Space situation remains tight!

Space remains overall tight these days, which obviously is very carrier and trade specific. AMLA, USA and Oceania being the worst to be reported in terms
of space. Vessels are running full with also plugs being completely utilized. Therefore we do not get tired of reemphasizing the importance of forecasting.
With no forecast and allocation we still see issues in the process which cause unnecessary problems in the whole supply chain.
Source: DHL, Shipping Lines
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Market Update, November 2021 - Middle East and Africa Exports
From East Africa
The main destinations are Europe,
Middle East and North America
Market rates are currently stable
for Reefers with a longer validity
period.
Bookings need to be placed at
least 7 – 10 days before sailing to
obtain space.
Mombasa port is currently under
construction/renovations which is
affecting the day to day port
operations. However, due to
sensitive nature of the cargo reefer
containers are still being given
priority.
Source: DHL, Shipping Lines
DHL | Ocean Reefer Market Update | November 2021
From MEA East Med/
Northwest Africa
The main destinations are Europe,
Middle East and North America
Reefer season from Morocco
started in mid of October, but not
as expected. Equipment
availability is not an issue but
space is anticipated to be
challenge tor the season. We
expect serious increases in rate
levels going forward.
Market rates in Egypt are stable
even though Reefer equipment
availability is a challenge.
Bookings still need to be placed at
least 10 days before sailing to
obtain space.
From Southern Africa
The main destinations are Europe
and Asia.
Market rates remain extremely
volatile and changing weekly.
Space is extremely tight across all
export trade lanes at the moment.
Carrier vessel schedule integrity is
poor, with multiple port omissions.
Carriers are under move count
restrictions, and multiple cut &
runs.
There is massive overflow of
booked / packed cargo waiting for
vessels to load. Vessels are full
until end December 2021.
Bookings need to be placed well in
advance.
Please expect further increases in
Reefer rates.
From Turkey
The main destinations are Europe,
Middle East ,North America and
Russia.
Carriers are not offering CH
haulage for US destinations, high
demmurage and and storage cost
still a big risk.
Sealand and Arkas will start the
seasonal reefer Levant-Black Sea
service, which connects Turkey
and Israel with Black Sea
Russia. 2x 1,300 TEU vessels, will
cover, Mersin, Ashdod,
Novorossiysk and back to Mersin
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Market Update, November 2021 - North America Exports by Trade
To Europe
Market rates remain stable with
available plug capacity from North America to
North and South Europe
Large Reefer Export volume is creating a deficit
of 40’ Reefer equipment in Norfolk, VA,
Oakland, CA, Seattle, WA and Vancouver, BC
Port congestion continues in New York, Norfolk,
Los Angeles, Oakland and Savannah.
Due to congestion in Savannah carriers have
switched port to Charleston/Jacksonville
Reefer Trucking Capacity in USA continues to
be limited due to large ocean freight volumes
Lack of chassis and GENSET in USA, we need to
ask and make reservation also at origin to
ensure GENSET will be provided at POD
Source: DHL, Shipping Lines
DHL | Ocean Reefer Market Update | November 2021
To Asia Pacific
Market rates continue to increase to
cover empty positioning cost of empty RF’s
from Asia; rates have increased two-fold over
the past quarter
Large Reefer Export volume is creating a deficit
of 40’ Reefer equipment in Norfolk, VA,
Oakland, CA, Seattle, WA and Vancouver, BC
Port congestion continues in New York, Norfolk,
Los Angeles, Oakland and Savannah
Reefer Trucking Capacity in USA continues to
be limited due to large ocean freight volumes
Lack of chassis and GENSET in USA, we need to
ask and make reservation also at origin to
ensure GENSET will be provided at POD
To South America
Market rates remain stable with available
plug capacity to South America
Large Reefer Export volume is creating a deficit
of 40’ Reefer equipment in Norfolk, VA,
Oakland, CA, Seattle, WA and Vancouver, BC
Port congestion continues in New York, Norfolk,
Los Angeles, Oakland and Savannah
Reefer Trucking Capacity in USA continues to
be limited due to large ocean freight volumes
Lack of chassis and GENSET in USA, we need to
ask and make reservation also at origin to
ensure GENSET will be provided at POD
Shipping Lines promoting NOR especially from
North America East Coast to South America
East and West Coast ports
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Market Update, November 2021 - South America Exports by Trade
To Europe
Market rates remain stable with
available plug capacity to Europe
Argentina, Brazil, Chile, Mexico and Peru face
severe limited inventories of 40’ Reefer
Request lead time of 30 days before sailing to
obtain space and equipment especially from all
WCSA ports
Port congestion continues in Colombia, Panama
and Peru
Focus to develop much needed Live Reefer
cargo from Europe into Buenos Aires and
Santos
Source: DHL, Shipping Lines
DHL | Ocean Reefer Market Update | November 2021
To Asia Pacific
Market rates are increasing to cover
the empty positioning costs of Reefers from
Asia to Latin America
Concerns with supply of empty 40’ Reefer
equipment positioning into Latin America;
especially to East Coast South America
Market Reefer volumes remain strong with
strong exports especially to China and Japan
Request lead time of 30 days before sailing to
obtain space and equipment especially from all
WCSA ports
Focus to develop much needed NOR from Asia
into Buenos Aires and Santos
To North & South America
Market rates increasing due to lack of
Reefer equipment in Latin America plus
available plugs are fully maximized especially
to Florida ports
Request lead time of 30 days before sailing to
obtain space and equipment especially from
WCSA ports
Focus to develop much needed NOR from New
York into Buenos Aires and Santos
Continue to review and develop the USA –
Mexico cross border market due to the lack of
truck capacity both in Mexico and USA
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Market Update, November 2021 - Asia Pacific Exports by Trade

To Europe /Middle East/Africa Intra-Asia/Oceania To North America & LATAM

• Space expected to remain tight to both

The market remains strong and rates are
expected to maintain at current levels until
end of November..
• Several transshipment port including SIN
TPEB and LATAM till end of the year.
are reported with 4-6 week rollover and
carriers are clearing backlog FI/FO basis
• To LATAM, many carriers are not willing
without much exception.
to offer rates for this sector as they are
fully booked, Rates when offered are only
• China’s power crisis is expected to further
max with 1 week of rate validity.
disrupt supply chains bringing longer lead
times . If the crisis continues, it will reduce
manufacturing output significantly and
lead to lower export cargo volumes and
longer lead times .

DG/Hazardous cargo in reefer

We are seeing increased delays from carriers with regards to acceptance of hazardous cargo; this is compounded by vessel delays and scheduling
amendments, which will impact acceptance from transshipment hubs.

Equipment free time

Carriers are not considering to extend free time owing to acute shortage of equipment in the market .
Source: DHL, Shipping Lines
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Economic outlook & demand evolution – Supply imbalances bring higher

inflation and lower global economic growth November 2021
Western Europe’s mid-2021 growth spurt is fading, and input shortages are constraining production. With the easing of pandemic-related restrictions, real
GDP likely posted another strong growth rate Q3, led by consumer spending. However, the IHS Markit PMI™ surveys indicate that shortages of electronic
components and raw materials are limiting production. Meanwhile, demand is cooling as rising inflation squeezes household real incomes. Eurozones real GDP
EUROPE should increase 5.0% in 2021, 4.0% in 2022, and 2.2% in 2023. While Emerging Europe’s growth prospects are a bit stronger, near-term growth is threatened by
new waves of COVID-19 cases in several economies, including RU,RO, and the Baltic States.
COVID-19 concerns and worsening supply shortages will delay some US growth beyond 2021. The forecast of real GDP growth was lowered 0.3 percentage
point, to 5.4%, in 2021, and 0.2 percentage point, to 4.3%, in 2022. The revisions reflect more cautious consumer spending, fewer light vehicle assemblies, and
weak third-quarter exports. On the positive side, a healthy report on retail sales in September indicates resilience in spending as COVID-19 virus infections decline.
AMERICAS The forecast assumes passage of the Infrastructure Investment and Jobs Act, but not the Build Back Better reconciliation bill with substantial increases in social
spending and taxes. With sustained growth in consumer spending on services, business investment, and exports, real GDP is projected to increase 2.8% in 2023
and 2.7% in 2024.
Mainland China faces headwinds from the real estate downturn and power shortages. Industrial production growth subsided to 3.1% y/y in September from
5.3% in August, with energy-intensive goods such as metals, chemicals, and construction materials hit hardest by power restrictions. Coal-based thermal power,
ASIA PACIFIC which accounts for 70% of the country’s electricity generation, has been constrained by Beijing’s decarbonization policies and cessation of coal imports from
Australia in 2021. Meanwhile, the government’s deleveraging campaign targeting property developers is deflating real estate and construction activity.
Asia Pacific economies are rebounding from third-quarter setbacks. With new COVID-19 cases diving from recent peaks, helped by rapidly rising vaccination
rates, Asia Pacific is poised for a strong rebound in late 2021 and early 2022. The recovery of manufacturing production will help to gradually ease global supply-
chain disruptions.
EMERGING &
High inflation in Latin America is prompting central banks to tighten monetary policies. Monetary authorities in BR, PE, CO, MX, and CL have reacted to high
DEVELOPING inflation by increasing their policy rates. While this would be a natural move under normal circumstances, it has created controversy in some countries. Emerging
COUNTRIES economies are still struggling with the pandemic, & some consider today’s high inflation to be a temporary shock that will soon be resolved. This higher inflationary
environment has led IHS Markit analysts to downgrade real GDP growth forecasts because central banks will likely continue to tighten monetary Policy as needed.
DEMAND After three months of deceleration, global economic growth slightly strengthened in September. The JPMorgan Global Composite Output Index (compiled by IHS
DEVELOPMENT Markit) increased 0.5 point to 53.0, led by growth in services.

Source: IHS Markit, IHS Purchasing Manager Index Manufacturing, a PMI at 50 is considered neutral, expanding above 50, and business shrinking below 50

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DID YOU KNOW?

INSIDE COMPONENTS AND FUNCTIONALITY OF A REEFER CONTAINER
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Did you know? Reefer Container –

Basic Knowledge

• We are starting a new series within our Reefer

Container Market Update where we will
explain the functionality of a Reefer
Container.

• Furthermore we will share some best

practices and some hints what need to be
considered to achieve good results on even
temperature distribution.

• We hope that you will enjoy the information

over the coming months.

• Today, we start in our first edition with basic

knowledge about the Reefer container.

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Did you know? How does a Reefer Container look like?

Reefer Containers are

always white in color

There are 6 major For specifications on various

components inside a Reefer brands/ models of Reefer
Container (refer to next Container, please check the
slide) DHL Reefer Type
presentation

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Did you know? Inside Components of a Reefer Container

Return-Air (can be on average up to 1,5°C higher than

supply-air)

Condenser, Compressor & Evaporator (behind)

Drain-Holes in each corner

Supply-Air (if lower than -10°C supply-/ return-air switch)

Lash-Points

T-bar Floor to provide good air-flow

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Did you know? Drain holes & lash-points inside a Reefer Container

4 Drains - One in each corner of the container Lash-points on the T-bar floor
Partly automatic drains

Partly with rubber- plug drain

Note: Check that they are clean and functioning Note: Not available in every Reefer Container

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Did you know? Reefer vs. Dry Container – Comparison on Europallet size loading

40‘ Dry HC = 24 Europallets

~ 12,03 m length
~ 2,35 m width
~ 2,65 m height

40‘ Reefer HC = 23 Europallets

~ 11,57 m length
~ 2,29 m width
~ 2,49 m height
~ 2,37 m max. loading height

Note: Depending on Reefer Container construction type, small differences are possible

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THANK YOU!

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