Delegates from all 5 continents attended the inaugural Cool Logistics Asia conference amidst fears over the softening China market
HONG KONG, 09.09.2015 – As stock markets are bracing themselves for more uncertainty over the future of the Chinese economy, Thomas Eskesen, founder of Eskesen Advisory, warned international delegates attending the 1st Cool Logistics Asia conference to “expect the unexpected”.
Rate volatility is expected to continue dominating global maritime reefer trades, but perishable cargo volumes overall should remain stable. This was the general consensus reached at the inaugural event, held in Hong Kong on 2 September.
Staged in partnership with GPE-Global Produce Events, the organiser of Asia Fruit Logistica, Asia’s leading fresh produce exhibition, Cool Logistics Asia 2015 drew over 120 top-level participants from more than 20 countries, adding a new geographical perspective to Cool Logistics Global, the flagship event organised by Cool Logistics Resources,. The 7th edition of Cool Logistics Global takes place in Bruges at the end of this month.
Topical themes at the first Asia conference included cold-chain finance, infrastructure investment, reefer shipping prospects and innovative perishable logistics technologies.
Predicting more consolidation of the reefer leasing sector, Nigel Webster, Director of Refrigerated Containers for Seaco Global, said that 42.4 per cent of the world reefer boxes are now owned by lessors. However, the biggest problem is the steady decline of return on equity (ROE). While container shipping companies have come to rely more than ever on lessors to finance reefer box acquisitions, supply of boxes is running ahead of trade growth, with equipment prices remaining stable, if not showing a small decline over a period of 14 years.
Lars Kastrup, Senior Vice President Asia at CMA CGM, highlighted that bigger vessels will increase the pressure on container terminals worldwide, with Tsunemichi Mukai, Senior Vice President at MOL Liner, cautioning that Chinese ports have insufficient reefer plug capacity to meet rising reefer box volumes, especially imports. China has barely 50,200 reefer plugs.
According to Kastrup, 55 % of bananas and 75 % of seafood will be shipped globally by containers by 2018 while conventional shipments will continue to decline in importance.
Meanwhile, Michel Looten of the Seabury Group forecast that Intra-Asia will continue to grow, fuelled by demands of the rising middle class, with India projected to pick up some of slack that may result from softening Chinese economy. Growth of up to 10 per cent is expected for perishables from Vietnam, Philippines and Thailand, with 6 per cent for the Intra-Asia region alone over the next 4 years. Nevertheless, China is expected to remain by far the largest exporter and importer of perishables in Asia.
As Tarun Arora, Director Finance Operations at fruit specialist IDG International revealed, fresh produce imports in India have steadily increased, led by apples and pears in particular. Nevertheless the country suffers from a very uneven distribution of cold-store capacity, with 60% of facilities concentrated in just 4 Indian states.
Despite pioneering investments by companies in cold-store capacity, such as Swire Pacific and China Merchants Americold, business risks remain very high in China, especially due to unpredictable national policy. Nevertheless as Clement Lam, Director and GM for Swire Pacific Cold Storage, revealed, the company is planning to open a new cold store in Nanjing in November with further investments in Chengdu, Xiamen and Wuhan.
China now has 93.6M CBM of cold-storage – that’s 55 % more than in 2013, but still only one third of cold store capacity compared with developed countries, Lam stressed. The country’s reefer truck fleet stands at a mere 800,000. Only 5 per cent of fresh produce, 15 per cent of meat and 23 per cent of seafood are carried in refrigerated trucks, according to MOL’s Mukai.
Not surprisingly, food safety remains one of the largest concerns of the Chinese population, fuelling further imports of fresh produce and protein. As Thomas Lau, Head of SCM & Logistics for retailer Metro Cash & Carry China, highlighted, there are over 90 million cases of foodborne diseases recorded in China every year. Metro is now rolling out a programme to put consumers in charge of tracing perishable products back to the farms. The new technology is primarily aimed at locally produced food.
Sandy Verma of US telecoms company AT&T pointed out that Internet of Things (IoT) technology is set to revolutionise reefer monitoring in the future. Yet the prospects for IoT will ultimately depend on resolving who actually owns the data, noted John Harnett of Sumisho Logistics in summarising the debate.
Given the clear success of this first Cool Logistics Asia conference, the date for the second Cool Logistics Asia has already been set. Next year’s event will take place on 7 September 2016, at the AsiaWorld-Expo centre in Hong Kong, once again alongside the Asia Fruit Logistica exhibition.
– Ends –
Information for the media
For more information on this release, to discuss media partnerships and/or press passes to attend, please contact: Holly Thompson, Communications Executive, Cool Logistics Resources Ltd | Tel +44 20 3327 0575 | Email: firstname.lastname@example.org
About the organisers
Cool Logistics Resources Ltd (CLR) has teamed up with Global Produce Events GmbH (GPE) to launch Cool Logistics Asia, as one-day high-level educational forum addressing perishable logistics and temperature-controlled transport, handling and distribution services across Asia
GPE, a joint venture between Messe Berlin GmbH and Fruitnet Ltd (UK), organises the annual Asia Fruit Logistica exhibition in Hong Kong, now entering its 9th year with over 8,000 visitors from 64 countries. www.gp-events.com
CLR develops specialist business conferences for the international perishable logistics and transport sectors, including Cool Logistics Global, now entering its 7th year, Cool Logistics Africa and Cool Logistics Americas. www.coollogisticsresources.com