The demand for “all things fresh” keeps growing, boosting reefer cargoes and the ports and terminals that handle them.
(Article originally published in Nov/Dec 2019 edition.)
With an ever-growing global demand for “all things fresh” – from a multitude of food products to pharmaceuticals and flowers and many other perishables – the amount of high-value, temperature-controlled cargo rises annually. Ports are getting plugged into the importance of this trade, and that means increased investment to keep those products fresh and moving quickly to market.
According to Martin Dixon, Head of Research Products for Drewry, an international maritime consultancy, the volume of seaborne reefer cargo rose three percent in 2018 to 129 million tons, slightly below the 10-year average of 3.5 percent but nonetheless substantial. He forecasts the global reefer trade will continue to expand at a rate of 2.7 percent a year in the period to 2023.
Dixon also believes that “containerized reefer traffic will expand at a faster rate, as its share of the trade is forecast to rise from 81 percent in 2018 to 85 percent by 2023, with the specialized breakbulk reefer shipping fleet continuing its contraction.” In addition to the fact that more reefer containers means more business for ports and terminals, the real bonus is the high value of temperature-controlled products.
An economic impact study done for the Port of Halifax on Canada’s East Coast revealed the high-dollar value of reefer cargo. The report stated that, on average, each 20-foot container exported through the port was worth C$24,000 to the Nova Scotian economy in terms of direct and spinoff activity.
For reefer cargo – mainly exports of fresh, processed or packed fish, lobster and other aquaculture or agricultural products – each container exported through the port in 2017 was worth C$107,050 to the provincial economy and provided C$61,695 in labor income. That high value is an attractive incentive to build the business.
On the U.S. West Coast, the Port of San Diego goes for the cold in a big way. In 2018, it received 828,603 million metric tons of containers containing bananas and other fresh fruit from Dole. That amounted to 44 percent of the port’s cargo, says Greg Borossay, Principal of Maritime Business Development for the port.
Large volumes mean required storage space and the infrastructure to move the product.
“The Dole vessels have increased in size over the years, and we have seen an increase in the number of containers too,” Borossay says. “The vessels now can deliver approximately 750 containers a week.”
The port has an on-dock cold storage facility at its Tenth Avenue Marine Terminal operated by San Diego Refrigerated Services. The facility provides more than 200,000 square feet of refrigerated space. “In addition,” adds Borossay, “we have Harvest Meat Food Distributors located adjacent to our National City Marine Terminal. This company provides cold storage and distribution services to the Southern California region.”
On the infrastructure side, San Diego is in the midst of a project to modernize its Tenth Avenue Marine Terminal. The plan includes a variety of improvements that would be phased in over time. The scheduled work for Phase I includes demolishing two transit sheds, site improvements including utilities, lighting and pavement, 7,200 square feet of new modular buildings to house office space and on-dock rail upgrades.
Future phases of the redevelopment plan include increasing consolidated dry bulk storage capacity, making enhancements to the existing conveyor system and installing up to two gantry cranes.
Borossay says the existing and planned upgrades give the Tenth Avenue Marine Terminal the capacity to handle one or two additional regional or niche container services to complement the Dole trade. In addition, the port is ready to go live with a Free Trade Zone (FTZ) at the terminal that will include a cold storage warehouse operated by San Diego Refrigerated Services.
At the National City Marine Terminal, the port is in the environmental review phase for a project that will improve operations, increase maritime commerce and add jobs. “The port has also been working on a project to study ways to improve mobility and safety for users of Harbor Drive, a main link between its two cargo terminals and industrial businesses on the waterfront,” he adds.
Port Everglades, which claims the distinction of being the top port in Florida for temperature-controlled cargo, says reefer containers made up 17 percent of its total cargo in 2018.
The port has its eye on increasing this cargo by marketing at perishable conferences including PMA, United Fresh, ExpoAlimentaria in Peru, Fruittrade in Chile, Fruit Logistica in Berlin and the World Avocado Congress in Colombia.
To expedite getting reefer containers off ships and off the docks and in anticipation of an expanding trade, Port Everglades will take delivery of three new Super Post-Panamax container gantry cranes before the end of 2020. In addition, Florida International Terminal is conducting a trial truck-appointment system, primarily for refrigerated containers, to minimize wait times. Neighboring Port Everglades Terminal is also expected to start a trial trucking appointment system in the spring of 2020.
Meanwhile, the intermodal container transfer facility owned and operated by the Florida East Coast Railway is making improvements specific to refrigerated cargo.
On the storage side, the port has partnered with Preferred Freezer Services to provide off-port warehousing for commodities needing refrigeration. More recently, in a new public-private partnership, Port Everglades and CenterPoint Properties broke ground on the nearly 300,000-square-foot Port Everglades International Logistics Center (ILC). The ILC will contain warehousing, a refrigerated warehouse, office space and cross-docking facilities when completed in the spring of 2020. The ILC will also be the new home for Foreign Trade Zone No. 25.
Reefer Supply Chain
The Port of Virginia says it’s always had the necessary infrastructure on terminal to handle cold cargo.
“We move reefers by barge, rail and truck,” says spokesman Joe Harris, “but we’re expanding our capacity to handle reefers as part of a larger cargo diversification effort. In fiscal year 2019, we handled 69,521 reefer containers, and this accounted for 4.2 percent of our total volume. As we target refrigerated cargo and build additional infrastructure to accommodate it, that number will increase, but we haven’t yet developed a target volume figure. With the infrastructure in place, we’re aggressively marketing our capabilities in this area.”
When the capacity expansion project at Norfolk International Terminal (NIT) is finished in late 2020, the port will offer more than 2,300 total reefer plugs.
With the Department of Agriculture’s In-Transit Cold Treatment Program now in place in Virginia, Harris says the potential to drive import volumes could create opportunities for Virginia-based cold storage warehouses and distribution centers to become “transload destinations”: The cargo comes to a local warehouse instead of one in the Northeast, gets loaded onto trucks and moves to its destination.
“In addition,” Harris notes, “increased reefer business means the possibility of more USDA inspectors in the market. Having that availability creates efficiency and can be a factor in driving this business to Virginia. When the equipment, support and infrastructure are readily available in the market, it creates opportunities for exports, and we become more competitive on that side of the business. So we see real potential to expand in this area of business.”
The port also has the ability to handle refrigerated cargo on the Richmond Express barge, which links the port’s terminals in Norfolk to the Richmond Marine Terminal with thrice-weekly service. In 2017 the port invested in a 40-plug power unit for the barge.
Port Tampa Bay is located within the Tampa Bay/Orlando/ Central Florida region, the largest and fastest growing consumer market in the state and home to the largest and fastest growing concentration of distribution centers in Florida. It’s ideally situated for trade in temperature-controlled products and the main reason Port Logistics Refrigerated Services (PLRS), operator of a new on-dock, state-of-the-art refrigerated warehouse, is located there.
The 135,000-square-foot cold storage facility has 6,348 racked pallet positions, 148 reefer plugs and on-site dedicated fumigation services. Safe, food-grade glycol is used as the refrigerant, and the facility has an on-site Customs and Border Protection inspection area and lab. The warehouse has an adjacent 700-foot deepwater berth served by two mobile harbor cranes.
“The PLRS facility is right next door to Port Tampa Bay’s container terminal, which has Super Post-Panamax cranes and is currently being expanded to 100 acres and over 4,500 linear feet of berth to be capable of working three large vessels at once,” says Wade Elliott, the port’s Vice President of Business Development.
“Port Tampa Bay has recently seen significant expansion of container services, adding three new direct weekly Asian services in 2019, complementing other connections to Mexico, Central America, the Caribbean and the west coast of South America,” he adds.
The new services obviously increase the potential for the port’s growing reefer business.
The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.