Market Trends of North America Refrigerated Container Shipping Industry
Increase in demand from agriculture and pharmaceuticals industry
- 2023's summer and autumn, fresh-market vegetable crops in California, Florida and Mexico were plagued with a variety of inclement weather, which limited supplies and contributed to increased shipping-point prices. Fresh vegetable shipping-point costs are likely to continue above seasonal norms until new or replanted fields are harvested in late December 2022 or early January 2023. Growers of vital winter foods such as tomatoes, bell peppers, and squash in Florida were forced to rebuild fields after Hurricanes Ian and Nicole. Long-term drought, above-average temperatures, an unusual late summer downpour, and high pest pressure chopped into marketable fall-season supplies of green and cruciferous vegetables in California. Mexico (an important supply of winter fresh veggies such as tomatoes, peppers, squash, and green beans), hurricanes impacted growers in Western and North Central production regions.
- The 2022 crop is the first time that yearly potato production dropped for 5 years in a row. Despite increasing planted acres in 2019 and 2021, productivity gradually declined over the last few growing seasons. According to the USDA's November Crop Output report, 2022, US potato output is down 3% from last year, owing to lower planted acres (down 2%) and poor growing conditions. The season-average price (including fresh and processed potatoes) achieved a nominal record high of USD 10.20 per hundredweight during the September 2021-August 2022 marketing year, marking the first time the season price topped USD 10 per hundredweight.
- The United States accounts for around 45% of the worldwide pharmaceutical market and 22% of global output. The continuous global vaccination rollout and pent-up demand for necessary and non-essential medical treatments propeled the US pharmaceutical output and sales in 2022. While immunizations were driving the sector development in 2022 and 2023, an aged population will increase medicine demand in the medium and long term. The Supreme Court's decision to maintain the Affordable Care Act (Obamacare) also bodes well for the industry's future growth prospects. However, when the pandemic was over, legislative pressure to cut healthcare expenses might rise again. Given the high R&D expenses for producers, this could impact the investment.
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Increase in demand for container shipping driving the market
- Port delays, labor shortages, inflation, and worldwide conflicts all altered how retailers ship and deliver items to customers. Several developing shipping concepts already taken hold and made their way into mainstream retail as of 2022: digitized supply chains, load balancing, and outsourcing fulfillment to a 3PL. Retailers who wish to optimize their operations should look into shipping patterns that are relevant to their business. Following the pandemic, businesses were dealing with both new and old shipping issues while attempting to meet customer demand. However, shipping delays and supply chain issues appear to be resolved by 2023.
- After years of rising transportation costs, businesses are now finding some respite. The current global average cost of shipping a container is USD 3,429, according to the Freightos Baltic Index, compared to USD 10,396 in October 2021. Carrier profits are expected to fall by up to 80% by 2024 when additional containers ordered during the pandemic become available, boosting capacity by up to 20% over the next two years. However, rates are unlikely to revert to pre-pandemic levels as long as the Russia-Ukraine war raises fuel prices.
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