Norway's Green Reefers, a leading carrier of palletized refrigerated cargo, blamed low spot rates, Russia's six month ban on U.S. poultry imports and high oil prices for second quarter pre-tax losses widening to $13.2 million from $11 million a year ago.
The Oslo-listed carrier's revenue shrunk by $400,000 to $43.1 million on lower Norwegian fish exports, a poor squid harvest in the South Atlantic and a slow start to South African citrus shipments.
First half losses grew to $17.4 million from $10.5 million in the same period in 2009 as revenue slipped to $98.5 million from $101.6 million.
By The Numbers: Europe-North America Westbound Container Trade.
Average reefer spot market rates in the first half were 10 percent below the levels a year ago and there was no significant peak season in the second quarter.
"Expectations for market improvements in 2010 have so far not come true, and we are facing the lowest spot rates for many years," the company said.
Green Reefers said low spot rates resulted from several factors occurring simultaneously -- Moscow's U.S. poultry ban, lower banana harvests, financial problems in the euro-zone and Russia and less fishing in the South Atlantic and South Pacific.
The slump has driven vessel demolition to a record high with 27 conventional reefer ships scrapped in the first half of 2010.
This represents 5 percent of specialized reefer capacity and is expected to lead to a better balance between supply and demand, according to Green Reefers.
The ongoing consolidation of the reefer sector also will improve market prospects, the company said.
Green Reefers said it contributed significantly to consolidation in June by joining the Hamburg-based Sea trade Reefer Pool which will manage 27 of its 43 owned and chartered ships.
The shrunken global fleet and consolidation, coupled with Russia's decision last week to lift the ban on U.S. poultry and rising ocean container freight rates will bring the market into better balance in the third quarter, Green Reefers said.
"The container operators report increased earnings but large resources of capacity are available, and it is too early to predict the long term effect."
"Historically, however, the container rates have had a certain correlation with reefer rates, traditionally with a delay."
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