Ocean Reefer Container Rate Outlook 2023

Although refrigerated (reefer) containers and their dry counterparts share the same ocean freight networks, their rates often do not show the same trends due to differences in supply and demand factors. Whereas dry container rates have been steeply declining, reefer container rates are expected to decrease at a significantly slower pace through 2023 yet remain elevated compared to their pre-pandemic levels.

Ocean refrigerated cargos are carried by reefer containers on containerships (87.6% in 2022), specialized reefer ships (11.1%), or reefer tankers (1.3%). This article discusses freight rates of containerized reefer cargos on containerships. Our earlier article addresses the opportunities to cut supply chain costs and emissions in reefer container use.

Dry and Reefer Container Rates up to Q3 2022

The Baltic Dry Index (spot rates) fell close to USD 4,000 in September 2022, a decrease of 25% MOM and 55% YOY (see Figure 1). The major factor leading to this steep decline is the huge freight demand slide for dry cargos, which are mostly nonfood (e.g. electronics devices, machine parts, textiles, household goods). Demand for these goods is subject to consumer discretionary spending and industrial production, which have been down because of heightened inflation, falling consumer confidence, and high inventory levels at large US and European importers. According to Descartes, US imports from China in September collapsed 22.7% YOY and 18.3% MOM. Dry container rates are expected to further decrease in 2023 given weakening freight demand and steadily improving maritime port operations.

In contrast, the Drewry quarterly reefer container index has only shown signs of increases, reaching a record USD 6,750 in Q3 2022 (see Figure 2). Yet the year-on-year growth rate, which peaked in Q4 2021, has been slowing down since Q1 2022; the small hike in Q2 2022 was due to the annual peak season of reefer trade. 

A decreasing year-on-year growth rate signals that reefer container prices are about to decrease from their current levels. The pace of decline, however, is expected to be significantly slower than that of dry container rates. Current reefer container rates may persist in Q4 2022, but a profound decrease in reefer container rates can be expected in Q1 2023. The following sections discuss demand and supply factors that shape this expectation.

Demand: Ocean Reefer Trade’s Resilient Growth

Unlike the falling freight demand for dry cargos, volumes in the ocean reefer container sector are expected to stay resilient through the economic downturn. During the 2008-2009 financial crisis, the sector’s year-on-year volume growth was positive in 2009, while the volume of dry cargos dropped 10% YOY. Seabury Cargo expects global seaborne reefer volumes to continue growing at a 2021-2026 CAGR of 3.1%. Drewry projects a similar number of 3.0%. 

For 2023, Rabobank expects global reefer container trade volumes to remain stable and with limited growth potential. Additionally, volumes may vary across reefer commodities and trade lanes. Fruit volumes may see no growth because of weakening demand as well as high production costs and price uncertainty. Seafood volumes are expected to stay strong, but growth may not be as robust as in 2021-2022. Meat volumes show a mixed picture: The EU diversified its pork exports to other regions, as volumes to China remain low; beef imports to China are expected to stay strong; poultry trade volumes are expected to remain strong as consumers may shift from beef and pork to poultry as the cheapest meat protein during economic recession.

Supply: Rising Reefer Plug Capacity, but Reefer Container Repositioning Remains a Big Challenge

Supply capacity depends on two factors: the availability of electrical plugs for reefer containers on containerships and the availability of reefer container equipment.

New Reefer Plug Capacity

Ocean liners have invested their huge 2020-2021 profits into new containerships. The majority of ordered containerships will be delivered in 2023 and 2024, correspondingly leading to increases in reefer plug capacity of 7.1% and 8.4% YOY, respectively (see Figure 3). The average annual reefer plug capacity growth for 2022-2026 is estimated at 3.9%, which is considerably higher than the ocean reefer trade growth discussed above. Reefer plug capacity will thus be not an issue in the coming years. However, effective reefer plug capacity can be negatively impacted by ocean liners’ strategies for sailings cancellations when dealing with low demand for dry cargos.

Reefer Container Repositioning Remains A Big Challenge

The total number of reefer containers worldwide is expected to reach 4m TEUs (20-foot equivalent unit) in 2026, with a CAGR of 3.4%. This growth rate is also higher than the expected reefer trade volume growth. 

However, distributing the right number of reefer containers to where they are needed remains a big challenge for three reasons. First, the import-export imbalances of major F&A exporting regions (e.g. South America, Central America) and importing regions (e.g. China) are high (see Table 1). Second, reefer cargos such as fresh produce are highly seasonal, which further complicates capacity planning. Last, ongoing port congestion (especially in the US and Europe) slows down reefer container circulation. As a result, shortages of reefer containers in exporting regions will remain in 2023 and will continue to bring upward pressure on reefer container rates.


Global supply capacity in the ocean reefer container sector will likely no longer be a problem in 2023. Reefer container rates are, therefore, expected to drop through 2023. The pace of decline, however, will be significantly slower than that of dry container rates because freight demand for ocean reefer trade is expected to stay resilient through the economic recession and reefer container shortages will still be an issue in major F&A exporting regions. However, rates will remain above pre-pandemic levels because of factors discussed in an earlier freight outlook: increasing operational costs (e.g. fuel), changing volumes in global trade lanes, geopolitical uncertainties, and stricter sustainability regulations coming into effect in 2023.