Cargo Business News - Current Issue


Home The Magazine Current Issue Archives Blog About CBN Subscribe Reprints Conferences Overview Southwest Intermodal Port Productivity Conference Southeast Freight Conference Northwest Intermodal Port Handbooks Overview Pacific Northwest Ports Handbook Golden Gates Ports Handbook Southern California Ports Handbook Buy Handbook Newswire Subscribe Archives Calendar Classifieds Advertise General Information Upload Files

Keeping your cargo cool Global temperature-controlled logistics market expected to hit to $126.9 billion by 2015 By Stephanie Nall For transport companies carrying refrigerated cargoes, the biggest question in 2009 could well be not how much business they win, but how much they are willing to invest during a downturn to develop future markets. Container carriers have watched their general import business to the United States drop by double digits this year, but the refrigerated trade has held up much better, according to speakers at the Cool Cargoes Conference held in Portland, Ore., in May. The importance of refrigerated cargoes and their growth potential was emphasized by a number of speakers. Food markets expand in Asia, Central, Eastern Europe and Russia Globally, the percentage of grocery retail goods that require temperature-controlled handling is estimated at 40-50 percent, according to M.K. Wong of ocean carrier OOCL. He said the retail sector’s strategic focus is moving towards the emerging economies and expanding markets of Asia, Central and Eastern Europe and Russia, resulting in significant market opportunity for cold chain players that are aggressive in these regions. Reefer container shipments into and out of the U.S. were down about two percent during the first two months of 2009, according to Vincent Rankin, head of reefer sales for APL. For ocean carriers, much of the drop has been in exports of beef, pork and poultry. But Ulises Carrillo, vice president of global logistics for Dole Foods, says business at his company remains on the upswing, both in the U.S. market and elsewhere. “Even with the economic downturn, people are continuing to eat fresh fruits and vegetables,” Carrillo said. “We don’t see that trend changing.” Developing countries have entered the fruit and vegetable market in a significant way, according to transport analyst Daniel Hackett of Hackett and Associates. He says fruit and vegetable exports are increasing from Africa, the East Coast of South America, Southeast Asia, India and Vietnam. Developing countries in Asia continue to present opportunities for market growth to U.S. producers, according to Wong. He also sees a dramatic growth in intra-Asia produce trade. “As India’s retail sector is expected to grow by 40 percent during the next three years, more than 340 million square feet of cold storage warehouse space will be needed by 2015 to accommodate growth,” Wong said. “Refrigerated warehousing is poised to evolve from more primitive facilities to sophisticated cold storage operations and hubs.” That change will position India as a vibrant import market and an increasingly important export source. And Wong sees China continuing its climb into an economy driven by the middle class. “It’s estimated that the Chinese middle class of approximately 500 million will spend more than $650 billion on food annually by 2017,” Wong said. He said three-fourths of that growth will be in second and third-tier cities in the nation’s interior. Wong also sees market opportunities in other spots around Asia. He said that Vietnam today resembles India approximately five years ago, combining individually owned cold chain-related retail outlets with a GDP growth rate at 7.5 percent. In 2002, the total global temperature-controlled logistics market, excluding pharmaceuticals, was $63.5 billion, growing 23 percent to $77.8 billion by 2006, Wong said. He estimated the current global market total at $80.66 billion, but said he expects it to climb to $126.9 billion by 2015 – a growth of 63 percent. “Right now, people are a little scared of the economy,” Carrillo said. “But if you look around the world, this is the right time to invest in this industry. There are growth opportunities.” Most speakers at the two-day event noted that consumers are increasingly concerned about food safety questions. People are more sensitive now due to the frequent occurrence of food safety-related incidents and scandals, Wong said.	In This Issue News, Trends & Analysis New Items One big reason for a weak global trade outlook Supply Chain Public-private partnerships: Inviting others to the table Keeping your cargo cool Compliance Corner: What you need to know about export commodity control numbers Supply Chain product review Communication technologies Features Gateway at a glance – Latin America U.S. domestic shipping looks ahead Ports & infrastructure East Coast ports and terminals moving dirt, doing deals Port Product Review Refrigeration technologies Commentary Difficult times create opportunities Who, What, Where, When Final Say
Home/Subscribe/Our Conferences/Ports Handbooks/Advertising Info/E-Cargo/Publishing Services/About Us Contact/Classifieds/Industry Calendar/Past Issues/Upload Files All contents of this site are copyright 2008 by Northwest Publishing Center and Cargo Business News and may not be reproduced in any way without express written consent of the author.

Keeping your cargo cool