The U.S. Department of Commerce (DOC) reported that U.S. shippers have converted reefer containers to dry containers.
Currently, container shortages and spatial mismatches have not been limited to dry containers.
U.S. importers and shippers have also experienced a shortage of refrigerated shipping containers, commonly known as reefers.
While the shortage has increased shipping costs for these containers by an average of 50% in the third and fourth quarters of 2021, this trend is expected to continue in 2022 and potentially 2023.
Dry container rates have also increased above reefer container rates. This has caused shippers to allocate more space to dry containers. In addition, some shippers have converted reefer containers to dry containers.
These actions have further exacerbated the reefer container shortage.
As an alternative to reefer containers, companies have increasingly turned to more expensive air freight, but air freight rates have also increased.
As a result, DOC added, some perishable products are being priced out of markets because transportation costs exceed their selling price.
International cold chain development is one of the fastest developing components of the global supply chain.
The pandemic has necessitated rapid development of cold chain capabilities in previously underserved parts of the world.
There have already been partnerships between logistics companies and biotechnology companies for vaccine distribution. From DOC’s perspective, this trend will continue as pharmaceuticals become more internationally traded.
In addition, international cold chain development is important for farmers in developing countries, where up to 40% of food is lost to damage or spoilage after harvest.
Cold chain systems can help reduce these losses and keep produce fresher for longer.
Shipments of food and agricultural products from developing countries to developed countries – such as Colombian flowers to the United States or Kenyan flowers to Europe – depend on cold chain services.
Without adequate cold chain infrastructure to move large shipments of these products after harvest, developing countries suffer economic losses and miss out on potential gains.