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OCEAN REEFER MARKET UPDATE

TEMPERATURE CONTROLLED BUSINESS

March – April 2022

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1 Topic of the month

Ocean Schedule Reliability

2 High level development

3 Market outlook

4 Reefer Capacity

5 Port Situation

6 Did you know?

Proper Cargo Loading and Airflow

DHL Global Forwarding | OFR Reefer Market Update | March 2022 2

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Ocean Schedule Reliability

Reliability even lower than in any month before
2019
2020
• Another month-on-month decline of -0.9 ptp let global schedule reliability reach SCHEDULE RELIABILITY (%)
2021
yet another negative record of 30.9% in January. 85 2022

• Although schedule reliability increased on the Asia to NAWC by 0.5 ptp to 10.3% it 80
still is the trade with the lowest reliability. Also on the Asia-NAEC reliability only 75
reached a low 17.3%. 70
• The trades that recorded the largest increase were the Asia-ECSA (+10.4 ptp to 65
46.7%) and Europe-Asia (+6.3% to 26.5%). Europe-Africa on the other hand was
60
the trade with the largest decrease (-10.7% zo 28.5.%).
55
• The Asia outbound trade to North Europe registered a reliability of 17.6% which
signifies a drop of -5.0 ptp compared to December. 50
45
40
35
30
J F M A M J J A S O N D
Source: Sea Intelligence, DHL

DHL Global Forwarding | OFR Reefer Market Update | March 2022 3

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High level market development

ECONOMIC OUTLOOK GDP GROWTH BY REGION1) INFLATION, YOY in %2)

CAGR 4.5
2021F 2022F 2023F 2024F 2025F 4.0
US
(2022-25)
3.5 CN
AMER 5.5% 3.9% 2.8% 2.7% 2.6% 2.7%
3.0 JP
ASPA 6.0% 4.8% 4.5% 4.3% 4.4% 4.4% 2.5
Eurozone
2.0
EURO 5.1% 3.7% 2.3% 1.7% 1.7% 1.9% 1.5 UK

1.0
MEA 3.7% 4.6% 4.2% 3.6% 3.4% 3.7%
0.5
0.0
DGF World 5.5% 4.2% 3.4% 3.1% 3.1% 3.2% -0.5
2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F

REEFER FREIGHT INDEX3) BUNKER PRICES4) Given the crisis in the Ukraine
bunker prices expected to increase
heavily

1) Real GDP, Copyright © IHS Markit, Q4 2021 Update 3 Dec ‘21. All rights reserved; 2) HIS Markit Q4 2021 Update 3 Dec ’21. All rights reeserved; 3) Drewry;; 4) Source: DHL

DHL Global Forwarding | OFR Reefer Market Update | March 2022 4

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Major trades – Market outlook March 2022 vs last update (1/2)

EUROPE NORTH AMERICA

Import region Capacity Rate Import region Capacity Rate

AMNO = + EURO = +

AMLA & MX = + AMLA = +

ASPA =/- = ASPA = +

MENAT = = MENAT = +

OCEANIA - + SSA = +

ASIA PACIFIC SOUTH AMERICA

Import region Capacity Rates
Import region Capacity Rates
EURO = +
EURO - =
AMNO = +
AMNO - =
ASPA = +
AMLA +EC / =WC -EC / =WC
MENAT = +
MENAT - +
SSA = +
OCEANIA - +

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

DHL Global Forwarding | OFR Reefer Market Update | March 2022 5

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Major trades – Market outlook March 2022 vs last update (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 --

DHL Global Forwarding | OFR Reefer Market Update | March 2022 6

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Balanced

Market Update, March 2022 - Overview Reefer Equipment Situation Tight

Deficit

> North Europe –Tight, LEH deficit

> South Europe – Tight
> HK & CN – Balanced > UK and Nordics – Tight to Deficit
> North Asia (KR & JP) – Tight > Turkey – 40’ Reefer Balanced, 20’ Reefer Deficit
> South East Asia – Tight in SG and TH
> North America WC (YVR/SEA/TIW/OAK) – Tight
> India – Tight > Southern Africa – Deficit
> North America WC (LAX) – Tight
> East & West Africa – Tight
> North America EC – Tight
> Morocco – Balanced
> Latin America WC – Deficit
> Egypt – 40’ Balanced,
> Latin America EC – Deficit 20’ Deficit
Source: DHL, Shipping Lines
DHL Global Forwarding | OFR Reefer Market Update | March 2022 7
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Capacity
Member of THE Alliance have announced that the carrier group’s North Europe – South East Asia – China – US West Coast ‘FP2’ pendulum service will be split into a South
East Asia – North Europe ‘FE5’ loop and a South East Asia – China – USWC ‘PS7’ service. This upcoming service split will be the only major change that comes with the
annual reconfiguration of THEA’s East – West network. The planned network updates will come into effect ‘from spring’.
Hapag Lloyd will launch a new standalone ‘express’ service to connect China’s Pearl River Delta to Germany. Scheduled to start operations in early April, the loop will
replace the German carrier’s slot agreement with the 2M alliance, which is being terminated at the same time. To be marketed as ‘China Germany Express’ (‘CGX’), the new
weekly loop will only call at the Shenzhen port of Dachan Bay and at Hamburg (transittime 27 days). It will not feature any intermediate ports on its way from Asia to Europe.
The new ‘CGX’ will remain outside the scope of THE Alliance, which offers five Asia – North Europe services now and will continue with this set-up after its annual network
update due in April.

MSC has announced changes to its current strategic cooperation with SM Line in the trade between the Far East and the West Coast of North America. The changes are
expected to also concern Maersk, with whom MSC cooperates on many Transpacific services under the umbrella of the 2M agreement. The 2M partners Maersk and MSC
will, as of May, cease to swap slots with SM Line on this trade.
Maersk, MSC and ZIM announced at the end of January that they will end their collaboration in the Asia – Med and Pacific North West trades as from 1 April. MSC and ZIM
have further also confirmed the termination of their cooperation in the North Europe – East Med trade as from March.
Maersk, MSC and ZIM however confirmed their intention to extend their cooperative working agreement between the Far East and the US East Coast and US Gulf.
The three carriers have now filed a third version of their cooperative work agreement on the Asia – US East Coast and US Gulf trades with the Federal Maritime Commission
(FMC) in Washington. They will continue to jointly offer six Asia – USEC and two Asia – US Gulf loops based on a slot exchange and vessel sharing agreement. The biggest
change from 2 April 2022 is that ZIM will be solely operating two of the Asia – USEC services, versus just one currently. The number of ships provided by ZIM will therefore
increase from the current 15 to 24.
Gothenburg-based tanker operator Concordia Maritime, part of Stena Group, disclosed in early February that it had launched a technical design study to determine
whether it was possible to convert some of its tankers into container vessels. The dismal state of the global tanker market and the continued boom of the liner shipping
industry have prompted Concordia to come to this unusual decision. According to an initial review, the tanker ships in scope could be converted into cellular container
carriers with an intake of approximately 2,100 TEU. A possible conversion is estimated to take about three to five months per vessel. Concordia pointed out that the proposal
would come with a number of challenges and the outcome of the technical design study, to be ready at the end of Q2, could also lead to the project not being implemented.

Source: Alphaliner, THE LOADSTAR, Dynaliners, Carriers

DHL Global Forwarding | OFR Reefer Market Update | March 2022 8
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Market Update, March 2022 - Europe Exports by Trade

To North America To South America and Mexico To Asia Pacific

Rates to East-Coast US are remain on The area remains a demand area, which The market has settled on this trade,
high levels, still on a slight way up, with several meanwhile causes issues, as Reefer partly pay while impact of CNY and the Olympics remain
increases on the PSS amounts from carriers. less than DRY. Having said this, DRY containers to be seen (Space and equipment supply).
West-Coast congestion is not improving at all. are partly preferred in regards to revenue It remains the case, that the interest of the
Developments are hard to foresee, which as making on carrier side. carriers on this trade is partly not existing.
well leads to increasing rates and longer and Current pain-point is Manila with a booking
unforeseeable transittimes. Overall all services remain fully utilized. Mexico stop and very limited services calling Manila
and South American West Coast being bigger these days.
For Canada East-Coast, the low water is waived pain-points than East Coast, but all have to be
meanwhile, however, rate tendency follows US handled with caution. Oceania remains critical, with full vessels and
East-Coast. limited capacity, especially on the feeder
services ex Asia.
Equipment situation in Europe (North and South) is remaining on “okay” levels.
Equipment overall okay, with most carriers rather short in Westport compared to DE. LEH remains biggest issue on basically all carriers. Equipment
supply will possibly be impacted by Olympics and CNY (blank sailings) in the coming weeks.
Space situation remains tight!
There are no big changes compared to last update.
We still emphasize pre-booking as early as possible to ensure proper flows.

Source: DHL, Shipping Lines

DHL Global Forwarding | OFR Reefer Market Update | March 2022 9
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Market Update, March 2022 - 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 Global Forwarding | OFR Reefer Market Update | March 2022
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,
especially for US and CAN
destinations. 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.
Grapes have started very strong,
and capacity and equipment are
tight. 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.
Citrus season is ended, carriers are
not supplying empty equipments,
40 reefer container is tight in
Istanbul, Izmir, Bursa and Mersin.
Only Izmit is balanced and rates
are increasing especially for North
and South America destinations.
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Market Update, March 2022 - 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,
and USWC ports.
With The Alliance service only MSC remains in
market with service from Seattle.
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 Global Forwarding | OFR Reefer Market Update | March 2022
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 from USWC ports
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
and USWC ports.
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
and USWC ports.
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, March 2022 - 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 shipment
to obtain space and equipment especially from
all ECSA and WCSA ports
Port congestion continues in Chile, Colombia,
Panama and Peru
Focus to develop much needed Live Reefer
cargo from Europe into Buenos Aires and
Santos
Source: DHL, Shipping Lines
DHL Global Forwarding | OFR Reefer Market Update | March 2022
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 & West 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, March 2022 - Asia Pacific Exports by Trade
To Europe /Middle East/Africa
Shipping will avoid the black sea for the
foreseeable future where the Ukraine port of
Odessa was closed shortly after the invasion
and carriers notified customers that the
country would not be called at for the time
being.
Equipment situation is still tight to M. East &
red sea.CN main ports are significantly
impacted. Carriers are restricting acceptance
of heavy cargo. VN/TH/ID/MY feeder space
and equipment shortage is still prevalent.
Planned blank sailings programs continue.
Overall 40% of capacity withdrawn on Middle
east trades and 25% from East Med trades in
Feb.
Source: DHL, Shipping Lines
DHL Global Forwarding | OFR Reefer Market Update | March 2022
Intra-Asia/Oceania To North America & LATAM
The season for fresh grapes from Australia is Most carriers are experiencing tight
now peaking in February and March and equipment & Chasis shortage issues.
closes in May.
Carriers are not keen to commit long term
NZ- Apple picking season starts mid Feb,
rates with space and prefer to offer bi-
peaking from March-May.
weekly rate offer.
Schedule reliability remain at all-time low,
vessels are delayed partly due to bad
weather conditions and strict measures of
epidemic prevention measures in China. This
resulted in congestions at various ports and
carriers are omitting ports for schedule
recovery purpose, please check with local
offices to updated schedule.
Several transshipment ports including
SIN/PKG are facing rollover, and situation at
TWKHH/HKHKG t/s port have eased.
However, carriers continue prioritizing
backlog on FI/FO basis without much
exception…
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Port Situation: major Congestion

Port Congestion: fewer ships waiting, but huge delays remain

Vessel delays remain a significant problem in the Asia – North Europe and Asia – US trades. *
According to latest researches, there has been no improvement yet since the latest trade survey’s
published last November.

Despite an overall decline in the number of ships waiting for a berth at Los Angeles/Long Beach
from a peak of 109 units on January 9 to ‘only’ 76 ships on Feb 14, the ports infrastructure
continues to be heavily congested and struggling to clear cargo backlog. Labor shortages due to
COVID-related reasons have increased in the last months and are impacting terminal operations.
Deliveries are still heavily delayed due the persisting lack of rail cars, shortage of truckers and the
chassis deficit.

The fronthaul transit time for ships sailing from the Far East to these twin ports has increased to an
average of 38 days, up from 28 days mid-November.

Vessel delays for ships on a full Far East – North Europe round voyage are also unchanged from early
November. The 14,000 – 24,000 TEU ships on this route still require an average of 17 days more
than their pro forma schedules to reach Central China for their next westbound trip. Skipping port
calls still appears to be the only way to avoid or limit lengthy delays.

We expect the situation to persist through 1H 2022 with a possible improvement in 2H 2022.

*RV = Round Voyage / Source: DHL, Carriers, Alphaliner

DHL Global Forwarding | OFR Reefer Market Update | March 2022 14
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DID YOU KNOW?

REEFER CONTAINER INSIGHTS

DHL Global Forwarding | OFR Reefer Market Update | March 2022 15

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Proper Cargo Loading & Airflow

Increase Cargo Density / Physical Mass (Weight)

• Dense cargo is more inert to temperature changes

Insulate Cargo
• Protect cargo with thermal / hi-tech packaging to keep
temperature during inactive period of reefer

DHL Global Forwarding | OFR Reefer Market Update | March 2022

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Proper Cargo Loading & Airflow

Loading limit

• Note the loading limit lines in the container (there are also lines near the doors). These loading
limits ensure that the air can circulate around the cargo to maintain the temperature.
• Floor space at the door-side which is not covered by cargo should be floored with wood (if towards
the doors is more than about 1,2 meter / 4 ft. of space).10% “free floor” might reduce circulation by
>20%.
• Gen-Sets for inland haulage are to be used to maintain stable temperature.

DHL Global Forwarding | OFR Reefer Market Update | March 2022

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Proper Cargo Loading & Airflow

Load cargo without „chimneys“ to avoid shortcutting
of the air flow.
FRONT FRONT
Leave space at the sides and between the pallets REFRIGERA REFRIGERA
TION TION
1 2 1 2

3
3 4
4

5 5 6
6

7 7
8 8
9
9 10
10
11 11
12
13 12
13 14
15 14
15
16
17
16
17 18
19
18 19
20 20

REAR REAR

DHL Global Forwarding | OFR Reefer Market Update | March 2022

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Proper Cargo Loading & Airflow

Best results are achieved when cargo flows around and between the load.

DHL Global Forwarding | OFR Reefer Market Update | March 2022

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Reefer Container loading Checklist

o Cargo was correctly packed and pre-cooled to transport temperature

o If possible cargo loading through a so-called Thermo-tunnel to avoid
temperature leakage
o Container is in good, clean and dry condition
o Container is set at the required set points (e.g. temperature, fresh air
ventilation, humidity and drain holes are open/closed)
o Reefer unit is not running while doors are open
o Container floor and drains are free of dirt
o Cargo is never stuffed above the maximum red load line
o Cargo is stable and evenly stuffed accordingly (e.g. weight should be
distributed for maximum stability and even cargo height increases circulation)
o T-floor is covered with cargo (or filler material) to enhance air-circulation
o Cargo (as well as any filler material) is blocked and braced as necessary to
avoid shifting
o Total cargo weight does not exceed the maximum payload of the Container
o Total weight of the Container (container, cargo, chassis and genset) does not
exceed the road limitations in any country crossed during transport
o Temperature sensors (e.g. DHL Smartsensor GSM) are attached if required and
confirmed that they are switched on and sending data
o Close doors, apply seal and ensure Reefer unit is turned on

DHL Global Forwarding | OFR Reefer Market Update | March 2022

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