Fruit shipper Fresh Del Monte Produce had no way of predicting the container shipping boom when it ordered newbuildings.
But the delivery of six high-reefer container ships just as the market was going through the roof is helping transform its ocean logistics arm Network Shipping (NWS).
Having its own fleet of container ships is giving the Florida-based company the chance to take advantage of opportunities created by a shortage of space in the container sector, said NWS commercial director Francis McCawley.
“These new assets have entered our fleet at a precise moment when the market is craving for better solutions to their logistics demands,” he told TradeWinds.
The company took delivery of its first container vessels from China’s Guangzhou Wenchong Shipyard in late 2020 and early 2021.
The last in the series, the 1,276-teu Del Monte Pride (built 2021), was delivered in April last year.
Equipped with 634 plugs for 40-foot equivalent unit reefer containers, the vessels “are essentially pure reefer vessels”, according to Alphaliner.
The ships ordered in 2017 and 2018 are designed for fruit-heavy trades between Central America and the US, with a focus on bananas.
Catching the wave
The timely arrival of the high-reefer boxships came as larger liner operators had taken their eye off the ball of the north-south liner trades, according to McCawley.
“The attention of the global carriers is on the east-west trade,” he said.
“There is a niche there and an opportunity for a shipping line like us to offer better solutions to the market.”
The six boxships are operating on routes to and from Ecuador, Guatemala, Costa Rica, Peru and the US.
Freight rates in the north-south trades were lower when the company started operating the container ships “but are catching up”, McCawley said. “That’s the wave we’re catching right now.”
He added that the services offered by mainline operators for refrigerated cargoes “are just too standard”, particularly for perishable cargoes.
NWS’ answer has been to offer superfast services, such as those lasting just four days from Costa Rica to Florida.
But it has still had to confront the problem of congestion that has blighted US ports.
It has done that by calling at smaller US ports away from the busy container hubs.
So instead of calling into Miami, NWS ships serve the smaller port of Manatee in the Tampa region.
On the US west coast, its vessels call at Hueneme instead of Los Angeles.
“Generally speaking, we haven’t suffered the same issues as other carriers,” McCawley said.
NWS’ customer base increased fourfold over the past year-and-a-half, he added.
Most are smaller shippers, although France’s CMA CGM also charters slots on the company’s Central America to US west coast service.
“We believe that the market is big for everyone and don’t look to discriminate if you’re a freight forwarder, BCO [beneficial cargo owner] or NVOCC [non-vessel operating common carrier],” McCawley said.
That helped NWS reach a record year for the in-house shipping company for revenues and cargo.
The success of the move into container shipping raises the question of whether the company will move further away from conventional reefers in the future.
“The discussion is always on the table,” McCawley acknowledged. “We are a lean, agile company and we like to seize opportunities when we find them.
“Right now, the market conditions have changed dramatically since we decided to change part of our vessel fleet.
“So, unless we see a good opportunity, all of our energy is focused on enhancing our current service delivery.”
Operating as a hybrid shipping line and cargo owner, the company owns and operates a fleet of 13 container vessels and conventional reefers.
Clarksons lists the company with six older conventional reefer vessels of between 308,000 cbf and 427,000 cbf.
Del Monte shipments have made up the lion’s share of its business for the past 20 years.
But the container ships enable NWS to build a new revenue stream and make its services more efficient by maximising the utilisation of the vessels, McCawley said.
“That’s something that will pay off in the long run if we continue our agency of growing and driving our business in a customer-centric way and not a one-size-fits-all approach.”
“We are a boutique shipping operation.”