As the freight rates for dry containers continue to shrink, ocean shipping is looking to develop cargo streams with a higher value. Logistics operators, carriers and ports are building infrastructure inland, developing distribution networks to move cargo and products quickly to the market.

Much of the high-value cargo business moves by air and road, but many shippers of temperature sensitive cargo, such as pharmaceuticals, flowers, confectionery are opting for the more cost-effective ocean container option.

According to the International Air Transport Association (IATA) in its 2018 Cargo Strategy report, shippers are looking to optimise the mix of modes ‘from air to less expensive or perceived more-environmentally friendly maritime and rail transport’.

There is also a growing trend towards a mix of sea-air, air-road and air-rail products to provide an optimal price and time flexibility.

The railway and road-based ‘Silk Road’ network, connecting Mainland China with Central Asia and Europe is capturing business from sea and air cargo. In the future, it may also be Hyperloop One, currently being considered for application within the Gulf region.


Ports are now an integral part of complex supply chains and serve as logistics centres, add value, link flows and influence the supply chain patterns and processes.

Port competitiveness is determined by its in-house strengths such as efficient freight handling, hinterland connections and geographical locations and its links in the global supply chains.

This integration of modes backed by digitalisation and improved inland infrastructure means that shippers can now look to switch from air to ocean.


The reefer container sector, particularly the Asia-Europe routes, have shown good growth this year. We asked Martin Dixon, Director – Head of Research Products at Drewry, what were the main drivers?

“The principle reasons have been strong growth in perishable seaborne trade combined with modal shift from break-bulk (traditional reefer ships) to containerships. Growth on the westbound Asia-Europe routes has been modest but remains significant. Eastbound refrigerated cargo growth out of the Mediterranean has been very strong, driven by rising living standards in Asia and a taste for Mediterranean fresh produce. With average Asian GDP per head continuing to rise, we expect trade growth to continue expanding over the next two years,” said Dixon.

Crucially in order for the seaborne reefer sector to grow, there needs to be investments to ports and hinterlands in Asia and Europe, to support growth in reefer container volumes.

“Investment in temperature-controlled storage continues to rise, both in and near ports and the hinterland – the latter particularly as increased containerisation of ocean cargo is reducing the need for port centric storage and handling facilities,” he added.

Reefer containers comprise 7 percent of total container volumes, with demand growing by between 5 to 6 percent during the last five years. Demand for dry containers only grew by between 2 and 3 percent during the same period, according to Drewry.


Dixon said that the main new reefer growth areas are pharmaceutical, cut flowers and confectionery. “More of this cargo have shifted from the more expensive airfreight mode due to improved temperature and product integrity monitoring, as well as reduced in transit dwell times which enabled more of these cargo types to move by sea,” he said.


Much of the high-value cargo moving through ports is freshly produced, with growth in consumer demand in Asia is growing significantly.

“The main export hotspots are the Philippines, which accounts for 80 percent of Asian banana exports, though most is intra-regional with Japan the biggest market. China is the largest exporter of deciduous fruits, mostly destined to other countries in Asia. The fish and seafood trade is fast growing and Asia represents around 40 percent of global imports, much of this originating in Europe and the Mediterranean. Brazil is also a major exporter of meats to Asia.”


So, what are the problems facing the reefer container sector in the coming year?

“Refrigerated container equipment availability can be an issue, particularly for inland locations. The supply position is improving as production ramps up but we expect tight conditions to persist over the medium term with implications for availability and freight rates. We are not aware of on-board power sources being a particular issue – generally there is very good availability of reefer plug capacity across the main reefer trades. But inland cool chain infrastructure remains an issue in developing markets,” concluded Dixon.

As demand grows for a range of high-value goods across Asia, there will be a corresponding rise in demand for ocean reefer containers and a cold chain infrastructure to extend to inlands markets in China, India and South-East Asia.

Ports, logistics companies and carriers are now investing in cold chain and competition is growing to capture market share in this lucrative, high-value sector. Speed to market, equipment reliability and a sustainable cold chain will be essential to the companies who want to succeed.


Pharmaceuticals is one major industry vertical that is increasing its use of ocean; its annual logistics value is estimated at US$64 billion by the International Air Transport Association (IATA).

Very complex, with a high-risk factor, transporting temperature sensitive pharmaceuticals has long been the exclusive domain of air cargo, which is able to comply with the tightly regulated sector and ensuring expensive, often life-saving products are delivered worldwide.

While ocean freight historically has been the ‘last saloon’ of choice for pharmaceuticals distribution, IATA reports 3.5 million metric tons of pharmaceuticals are shipped by ocean each year, compared with 0.5 million metric tons by air, and this number is only increasing.

In the last five years, ocean transport has built a higher profile in the pharmaceuticals industry. Cost competitiveness is the key driver for pharma shippers, as it is up to 80 percent less expensive than air transport, according to the report. Most pharmaceuticals are time-sensitive, but for products that don’t have to be moved quickly, ocean freight is a less costly option.

In addition, ocean transport has a lower carbon footprint than air and road transport. For businesses with sustainability goals in mind, ocean freight offers significant opportunities in reducing their carbon footprint.


According to flowerweb.com spokesperson the president of Colombian flower exporters association Asocolflores, Augusto Solano predicted that 10 percent of the world’s flowers will move by sea in 2018 up from 3 percent in 2012.

Transporting flowers over sea requires significant effort and cooperation in the supply chain. Blooms are near-frozen shortly after harvest and kept that way for up to two weeks as they make the journey by ship in refrigerated containers.

Some flower varieties simply cannot handle that treatment. For the more robust blooms, however, it will likely increasingly become the standard.