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Container Shipping Rates Stabilize Post-Red Sea Crisis

Spot Rate Surge Reaches Its Peak

As of January 26, 2024, the container shipping industry witnesses a significant shift. The massive rerouting of container ships around Africa’s Cape of Good Hope, initially causing a spike in spot rates due to the Red Sea crisis, now shows signs of reaching its zenith. The initial surge in rates, driven by these diversions, appears to be plateauing, with several European lane indexes retreating from their peaks.

Shanghai Index Indicates Market Cooling

In a notable development, the Shanghai Containerized Freight Index (SCFI) recorded a 2.7% drop in the week ending Friday, marking its first decline since late November. This trend hints at a broader stabilization in the market, contrasting the previous continuous upward momentum in rates.

Shift From Pandemic-Era Dynamics

The current situation starkly differs from the pandemic years of 2020-2022. Unlike the demand-driven supply chain crisis during the pandemic, the current rate increase is predominantly supply-driven. The extension of voyage times due to liner diversions around the Cape of Good Hope has strained shipping and container equipment supplies.

Future Outlook: Stabilization and New Vessel Deliveries

The industry anticipates further stabilization as shipping lines adjust to longer routes and incorporate a record number of new ships slated for delivery this year. The upcoming Chinese New Year holiday is also expected to temporarily reduce vessel demand, potentially easing rate pressures.

Predicted Rate Trends Post-Chinese New Year

Experts, including Lars Jensen, CEO of Vespucci Maritime, anticipate a shift in the market post-Chinese New Year. While spot rates are expected to decrease slightly, contract rates might rise as the industry possibly adapts to a prolonged round-Africa routing. This pattern is evidenced by the contrasting movements of the Shanghai Containerized Freight Index (SCFI) and the China Containerized Freight Index (CCFI).

Platts and Drewry Indices: A Mixed Picture

Data from Platts and the Drewry World Container Index (WCI) present a mixed picture. While Platts assessments indicate a potential peak in spot rates, the WCI shows a continued albeit slower rise in European markets. This divergence reflects the complex and varied responses across different shipping lanes.

Freightos Baltic Index: A Steady State

Lastly, the Freightos Baltic Daily Index (FBX) reveals a relatively steady state in global composite rates, with minor fluctuations in specific routes. This stability, however, masks the underlying high rate levels, especially in U.S. import lanes, that remain a legacy of the Red Sea crisis.

In conclusion, the container shipping industry is experiencing a nuanced adjustment period post-Red Sea crisis, marked by a mix of stabilization and continued high rates, influenced by both lingering effects of the crisis and new market dynamics.

Lineage Logistics Prepares for a Massive $30bn IPO

Reports indicate that Lineage Logistics is preparing for an Initial Public Offering (IPO) valued at an impressive $30 billion this year. This move would significantly elevate the cold chain solutions provider above its competitors, notably Americold Realty Trust, which currently has a market capitalization of $8 billion. Lineage boasts an extensive network, with over 430 warehouses in 20 countries, demonstrating its substantial presence in the global market.

Cold Storage Market Experiences Rapid Growth

The cold storage sector is experiencing a surge in demand. The Cold Storage Construction – Global Strategic Business Report reveals that the global market, currently valued at approximately $11.6 billion, is projected to escalate to $32.8 billion by 2030. This growth is attributed to the rising global demand for chilled and frozen goods, necessitating a significant expansion in cold chain infrastructure. A study by the Columbia Climate School published last year underscores this trend, highlighting the need for increased cold chain solutions.

Reefers Gain Momentum in Maritime Transport

The maritime sector is also witnessing robust growth in the reefer market. The global fleet of reefer containers stands at around 1.5 million units. Estimates suggest a 3% growth in reefer plugs last year, with a projected 2% increase this year and 5% in 2025. Although reefer trade offers more stable demand and rates for ocean carriers compared to general containerized cargo, it also increases their energy requirements and carbon footprint. SeaCube, a reefer provider, notes that accommodating 10% of a ship’s capacity for reefers results in a 30% increase in energy demand.

Environmental Impact of Cold Chain Solutions

The Columbia Climate School’s study highlights the significant environmental impact of refrigeration systems, including industrial chillers and transport. These systems are responsible for up to 5% of global energy needs and 2.5% of total greenhouse gas emissions. Moreover, supply chain activities contribute to 18% of the greenhouse gas emissions from the global food production system. This scenario places the industry at odds with tightening environmental regulations, such as the Paris Agreement and various national and regional directives.

Lineage Logistics’ Sustainability Efforts and Industry Challenges

Lineage Logistics, acknowledging these environmental challenges, published its first sustainability report in 2022 and committed to achieving net-zero emissions across its operations by 2040. However, with just a 0.5% reduction in same-store emissions year-on-year, the company recognizes the long journey ahead to reach this target. The industry is increasingly focusing on technological solutions for supply chain traceability, balancing emissions reduction with improved efficiency. Nevertheless, doubts remain about the overall impact of these efforts on emissions, with a consensus forming around the need for collaborative solutions.

Collaborative Initiatives and Global Participation

In a significant move, Lineage joined the Move to -15°C coalition, an initiative adjusting the standard temperature for frozen food storage. This coalition, formed based on research led by the University of Birmingham, aims to raise the standard temperature from -18°C to -15°C without impacting food quality. This adjustment could reduce carbon dioxide emissions by 17.7 million tonnes annually. Notable participants include AP Møller-Maersk, Kuehne + Nagel, MSC, DP World, and Ocean Network Express.

Decarbonization Efforts Extend to Developing Nations

Decarbonization efforts are not limited to industrialized countries. Carrier Transicold’s recent collaboration with the Greener Reefers in International Maritime Transport (GIZ) initiative aims to advance cold chain development in countries like Costa Rica and South Africa. This project focuses on training technicians in the use of natural refrigerants for reefer containers, emphasizing sustainable solutions and energy optimization. The Columbia Climate School notes the rapid expansion of cold chains in developing countries and emerging economies, with China’s cold chain market expected to nearly double by 2026. Researchers stress the importance of climate-sensitive technologies and policies to mitigate the environmental impact of these growing cold chain networks.

The Top 5 Refrigerated Transport Companies in The World

Discover the largest refrigerated transport companies worldwide. J.B. Hunt Transport, Schneider National, Swift Transportation, C.H. Robinson Worldwide, and Kuehne + Nagel boast massive fleets, offering expert refrigerated transportation for fresh and frozen goods, dry goods, and more.

The largest refrigerated transport companies in the world are:

J.B. Hunt Transport Services, Inc.
- J.B. Hunt is a Fortune 500 company based in Arkansas, USA. It is one of the largest transportation and logistics companies in the world, with a fleet of over 12,000 trucks and more than 100,000 trailers and containers. The company specializes in refrigerated transportation of fresh and frozen goods, as well as dry goods and household goods.
Schneider National, Inc.
- Schneider is a privately held company based in Wisconsin, USA. It is one of the largest trucking companies in the world, with a fleet of over 12,000 trucks and more than 50,000 trailers and containers. The company specializes in refrigerated transportation of fresh and frozen goods, as well as dry goods and household goods.
Swift Transportation Co.
- Swift is a publicly traded company based in Arizona, USA. It is one of the largest trucking companies in the world, with a fleet of over 18,000 trucks and more than 50,000 trailers and containers. The company specializes in refrigerated transportation of fresh and frozen goods, as well as dry goods and household goods.
C.H. Robinson Worldwide, Inc.
- C.H. Robinson is a publicly traded company based in Minnesota, USA. It is one of the largest third-party logistics (3PL) companies in the world, providing transportation, warehousing, and logistics services to companies of all sizes. The company has a fleet of over 40,000 vehicles and more than 100 million square feet of warehouse space.
Kuehne + Nagel
- Kuehne + Nagel is a privately held company based in Switzerland. It is one of the largest logistics companies in the world, with a strong presence in the refrigerated transportation market. The company operates a fleet of over 1,200 vehicles and provides logistics services to companies in a variety of industries, including food and beverage, healthcare, and consumer goods.

Read: Top Headline “How Elior is becoming a world leader in Food Services Distribution”

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The Top 10 Global Cold Storage Industry Players

Cold storage is an essential component of the logistics and supply chain industry, as it allows for the preservation of perishable goods such as food, pharmaceuticals, and chemicals. The global cold storage market is valued at over $130 billion and and projected to reach $174.8 billion by 2027, growing at a CAGR of 4.4% during the forecast period.

The increasing demand for frozen and chilled food products, rising awareness about food safety and preservation, and the growing demand for temperature-controlled logistics are some of the key factors driving the growth of the market.

Here is a list of the world’s largest cold store companies and a brief overview of their operations:

Americold Realty Trust: Americold is the largest publicly-traded real estate investment trust (REIT) focused on the ownership, operation, and development of temperature-controlled warehouses. The company operates over 180 facilities in the Americas, Australia, New Zealand, and Europe, with a total storage capacity of over 1 billion cubic feet.
Lineage Logistics: Lineage is a global provider of temperature-controlled logistics solutions with a portfolio of over 300 facilities in the Americas, Europe, and Asia. The company specializes in the storage, handling, and transportation of perishable goods, including frozen and chilled products.
Burris Logistics: Burris Logistics is a leading provider of temperature-controlled logistics services with a network of over 50 facilities across the United States. The company offers a range of services including storage, transportation, and distribution of frozen, chilled, and dry goods.
Swire Cold Storage: Swire Cold Storage is a leading provider of temperature-controlled logistics services in the Asia-Pacific region. The company operates a network of over 50 facilities in China, Hong Kong, Malaysia, Singapore, and Thailand, providing storage, handling, and distribution services for frozen and chilled products.
The Schwan Food Company is a privately held company that is one of the largest frozen food manufacturers in the United States. The company operates a network of cold storage warehouses and distribution centers to support its manufacturing and retail operations. The Schwan Food Company is known for its frozen pizza and other frozen food products.
Cloverleaf Cold Storage: Cloverleaf Cold Storage is a leading provider of temperature-controlled logistics services in the United States, with a network of over 30 facilities across the country. The company offers a range of services including storage, transportation, and distribution of frozen, chilled, and dry goods.
Cloverdale Foods: Cloverdale Foods is a leading provider of temperature-controlled logistics services in the United States, with a network of over 20 facilities across the country. The company specializes in the storage and distribution of
Agro Merchants Group is the fourth-largest cold storage company in the world, with over 300 million cubic feet of refrigerated space across 40 facilities in Europe, North America, and South America. The company offers a wide range of services including refrigerated warehousing, transportation, and logistics solutions.
Kloosterboer is a privately held company that provides temperature-controlled warehousing and logistics services in Europe. The company operates over 20 facilities in the Netherlands, Germany, Poland, and the United Kingdom.