THE conflict in Ukraine could lead to further disruption in the reefer market but any reduction in demand to and from Ukraine and Russia could benefit shippers by freeing up capacity and lowering freight rates.

The two countries account for around 4.5% of global seaborne reefer demand, according to Drewry reefer shipping analyst Philip Gray.

“Any disruption to trade will bring significant impacts for cargo owners, container carriers and specialised reefer ship operators,” he said.

Russia imported close to 4m tonnes of fresh produce by sea in 2021, he added. Of this, 40% was bananas from Ecuador and Central America, equating to around 600 feu per week on average.

“If this trade stops or slows there will be a surplus of equipment and space which will likely bring short-term respite for shippers of seasonal produce from the west coast of South America, which are currently struggling for capacity to both Europe and North America,” said Mr Gray. “The wider implications for the fruit exporting business will be felt very fast, as traditional markets become oversupplied with produce, putting pressure on prices.”

Direct cargo services into the Black Sea have been stopped, placing a severe logistical challenge for cargo which is already on the water.

“But tramp shipping, including specialised reefer vessels, is a highly flexible mode of transport that can easily adapt,” he said. “If cargo demand sustains but is throttled by container carrier reluctance to serve the war-torn region, it may create an opportunity for operators of specialised reefer ships, assuming they are allowed to.”

Russia is also a major exporter of refrigerated cargoes, particularly fish, which is transhipped at sea to a fleet of largely Russia-flagged conventional reefer vessels.

While vessels connected to Russia are finding it harder to trade globally, the majority of these cargoes are discharged in China.

“There is little reason to believe that this trade will be impacted in the short term, unless China takes the unlikely measure to ban Russian flagged vessels from its shores.”

Nevertheless, freight payments and partial cargo payments, which are made in US dollars, for cargo that is already on the water will complicate things further for cargo owners, receivers and vessel owners, Mr Gray warned.

“The overall impacts are expected to be mixed, with import trades more affected than export reefer traffic, in the short term at least. Looking further ahead, a prolonged conflict is expected to see perishables trade diverted to new markets, creating opportunities elsewhere.”