Cold Shades of Gray

Refrigerated transportation has come a long way from the days when Union Pacific Railroad put huge chunks of ice in boxcars to keep produce or meat from spoiling as it moved to market.

It’s not just a matter of refrigeration; modified atmosphere means apples can taste fresh after months in storage and a slow ocean journey to a far-off port. Modified atmosphere containers also can be used to deliver roses by ocean, instead of air.

Last month, I had the opportunity to try some exotic species of Korean fish. The dishes featured olive flounder, black rockfish and turbot that had been swimming in nearby tanks, right up until they were cleaned, cooked and served after having been imported live from Korea.

Technology developed by a number of companies has given the food and floral industries the opportunity to reach new markets using ocean transportation instead of more costly air freight. The biggest hurdle to widespread use of the technology is cost. The maritime tank containers used to bring the live fish from Korea cost more than $100,000 each. And containers equipped with modified-atmosphere capabilities cost more than the typical refrigerated box (which isn’t cheap at $18,000 to $20,000).

Equipment that expensive has to be operated efficiently and used frequently to make sense. A white paper put out by an industry working group points out that today’s operating methods don’t translate into financial viability.

The Grey Reefer Asset Management Round Table met in Antwerp earlier this year to discuss the possibility of developing an industry management pool concept for reefer boxes, similar to the chassis gray pools being used in the U.S.

One of the group’s findings is that the average reefer box makes just four round- trip voyages a year and is held in service for about 9 ½ years. When the initial cost of $18,000 to $20,000 is factored in, the answer to the equation is rather shocking: The average reefer box makes 35 trips in its lifetime at a fixed cost of more than $500 per trip.

In theory, setting up a system that would allow neutral managers to control boxes and direct them to the next paying load without expensive repositioning could increase productivity and help keep costs down.

It’s also a concept that will be complex, controversial and perhaps years away. Steamship lines have traditionally taken the position that they want to own, or at least control, the equipment. Insurance claims on loads damaged in transit are costly in the reefer sector, and the carriers say they are in the best position to keep quality high and claims down.

Demand for refrigerated shipping is growing, but profit and revenue haven’t followed suit. That has led carriers to postpone buying more boxes. To profitably meet demand and stay in the black, container carriers may have to start thinking in shades of gray.

Contact Stephanie Nall at stephnalljoc@gmail.com.

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