Reefer container shortage in U.S. leads to increased air freight demand

U.S.: Air freight demand rises amid ongoing reefer container shortage and delays

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U.S.: Air freight demand rises amid ongoing reefer container shortage and delays

U.S. importers and shippers of perishables are continuing to experience a severe reefer container shortage stemming from the Covid-19 pandemic, which in turn has led to increased demand for more costly air freight.

There are shortages of frozen, dehydrated and fresh potatoes in many markets because US exports of the vegetable have been hobbled by the shortage of ocean containers, according to website The Load Star.

Importers of fruit and other vegetables are also feeling the pain, one based in Miami reported vessels bringing in fruit from Central America had suffered delays, resulting in missed departure times for reefer trucks heading to supply U.S. markets.

This in turn has resulted in several days of delays getting the imported produce to its destinations.

However, the outbound issues have not resulted in significant spoilage, noted Chris Connell, senior vice-president, perishables, North America at Commodity Forwarders, a Kuehne + Nagel company.

For one thing, temperatures have been seasonally low, but the more important factor is that many exports have not arrived at ports where they might have got mired in congestion – the shortage of reefers has prevented most from moving to the ports in the first place, said Connell.

Many shippers have explored alternatives. With exports of stone fruit like peaches and nectarines nearing, interest in airfreight particularly has picked up.

“We’ve definitely had an increase in calls for airfreight quotes for spring and summer food export program. We even had some inquiries for charters,” reported Mr Connell. The uptake has been slender, though, he added.

“Once we quote, people who are not used to shipping by air have ‘sticker price shock’, and those who have done air but not charters have sticker price shock at charter rates,” he said.

Airfreight capacity has been tight – tighter, in fact, than a year ago, he said, adding: “Last year we had all these charters with PPE coming in, which provided a lift for exports. This year that’s gone.”

The cherry season – usually the highlight of US fruit exports – will be a key test of market conditions. The California crop has yielded good numbers, but the fruits are generally smaller this year, which works well with markets like Japan, but not Korea, China and Australia, where consumers prefer larger cherries.

There is no hope of a quick end to the reefer container shortage, however, said Connell. While there have been some positive signals, this should take multiple cycles to improve.

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