[120813.EN.SEA] Chiquita Saves US$12 Million A Year Using Containerships For Bananas

CHIQUITA Brands International, which grows and ships bananas worldwide, revealed in its quarterly results report that it saved US$12 million a year by moving produce in containerships, reported American Shipper.

Chiquita, the parent company of Great White Fleet, said that the reconfiguration of its European shipping system, starting from the third quarter of 2011, provided these annual savings net of transition costs which included expected losses on vessels that were removed from service in 2011 and 2012.

"Comparable operating income of the banana segment excludes a charge of $6 million in the first quarter of 2012 for net losses on certain ship sublease contracts. These sublease losses will not recur in 2013 since primary leases for vessels expiring at the end of 2012 were not renewed," said the Chiquita quarterly report.

 

Because of the proliferation of self-contained refrigerated container systems on containerships, there are signs of a shift away from conventional reefer shipping in favour of container shipping, when it comes to the export of fruits.

Drewry maritime Research's Container Consensus reported the refrigerated container fleet grew 13 per cent during 2011, almost double the 6.6 per cent increase achieved in the year before.

The Financial Times reported last year how fruit shippers like Fyffes of Dublin and Goreefers of Cape Town have discovered the same thing and have shifted towards containerships..

"This has been happening for the past eight years or so, it's just accelerated as the price of oil has risen," said Goreefers spokeswoman Sharon Cilliers.

"With container shipping the per unit cost is so much cheaper than on a conventional reefer vessel. There needs to be 2,500 containers on board, as opposed to 3,000 pallets on a reefer vessel. There is no way to combat this and we've seen a number of reefer shippers shut down.

"Ten to 12 years ago conventional shipping was big and containers were very small, now the situation is totally reversed."

In its annual report Chiquita said as a result of the shipping reconfiguration, five chartered cargo ships were subleased to third parties until the end of 2012, and eight ship charters were not renewed for 2013.

Source : HKSG.