Reefer containers go through a lot of wear and tear during the shipping process. Damages happen, and when they do it’s important to have the right insurance. We’ll help you protect your boxes with our container insurance plans. Also, cover all there’s to know about reefer container repair.

Reefer containers are the key components of transportation of perishable goods and they’re also quite prone to damage. Even a little damage to a reefer container can impact the cargo that’s being transported. Repairing reefer containers is costly, but not when you have the right insurance in place. xChange helps you insure your boxes so you don’t have to worry about the repair costs.

Let’s understand a bit more about repairing your reefer containers and the types of insurance you can get to cover the cost of repairs.

But before we get into it, you can use our public search bar to look for reefer containers easily.

What is reefer container repair?
A reefer container is a specialized container that carries temperature-sensitive goods like food items, pharmaceuticals, and plants. Repairing reefer containers involves determining which component of the container is damaged and needs to be fixed.

Reefer containers are very sensitive and require additional care for their maintenance. Material overstressing, extreme weather conditions, and contamination can cause significant damage to the containers. Sometimes inexperienced fork lifters also cause damage during the loading and unloading process.

Periodic maintenance of your reefer containers is essential. You should also check for damages frequently. This will not only help in the maintenance of the container but will also reduce the cost of repairs in the long run.

Now let’s take a look at the different types of reefer container repairs.

Types of reefer container repairs
Here are some of the most common repairs that reefer containers undergo regularly.

Reefer container floor repair
Container flooring differs from one container to another. The floor of most reefer containers is made with plywood. Although it’s a sturdy material, it often needs repairs due to constant wear and tear. The constant pressure from goods can cause the floors to become uneven and even crack.

It’s important to routinely check the floors of reefer containers as even a minute crack can damage your cargo.

Rust removal from reefers
Rust removal is a common type of shipping container repair. Most shipping containers are prone to rust since they’re constantly exposed to harsh weather. Rust can further lead to holes in the container walls. Repairing these holes in reefers is going to be more costly.

On the surface level, sandblasting can help. If the rust is underneath the paint, it’ll need to be cut out and welded with a new piece of steel.

Compressor repairs in reefers
The compressor in reefer containers helps maintain the ideal temperature and pressure. Any damage to the compressor can damage your cargo. Regular repairs and maintenance can help reduce the running cost of the reefer container as well.

Cooling unit repair
Similar to the compressor, the cooling unit helps maintain the ideal temperature in the reefer container. Any issues in the cooling unit of a reefer container require professional help. The professional will either repair the cooling unit or replace it with a new one.

Door seal repair
Door seals are made of rubber and keep the reefer container air and water tight. The rubber disintegrates over time and requires frequent repairs. This helps maintain the required temperature and pressure within the container.

Most of these damages are inevitable. The cost of repairing these damages can add up significantly if you don’t have insurance. This is where xChange can help you.

We’re a neutral marketplace for buying, selling, and leasing shipping containers. Plus, we can help insure your boxes, top up your existing cover, and can make the process of repair claims easy.

5 benefits of refrigerated shipping container repairs
Reefer container repair can have various benefits. Let’s look at a few of them.

• Helps maintain ideal temperature: Repairing your reefer container can help in maintaining the ideal temperature inside. The right temperature is crucial for transporting perishable goods.
• Maintain ideal humidity: Similarly, repairing reefer containers can also help in maintaining the ideal humidity. This is also important for keeping the goods fresh while transporting them.
• Extends the shelf life of reefer containers: Regular repairs can help extend the shelf life of the container. Moreover, they can reduce operating costs and help with energy efficiency.
• Maintains required airflow and ventilation: Airflow and ventilation are crucial to maintaining the right temperature within the container. Regular repairs can help you do that.
• Helps keep cargo fresh: Reefer containers are mostly used for shipping perishable goods. Regular container fumigation and repairs help the cargo remain fresh during transportation.

Now that we’ve looked at the various benefits of repairing your reefer containers, let’s understand how much this can cost.

Reefer container repair costs: How to insure your container for damage or loss
The cost of reefer container repair depends on the damage your container has. If the damage is significant, the cost will also be more. For example, repairing the cooling unit or compressor costs more than repairing the door seal. However, even the cost of minute repairs can significantly add up in the long run.

What’s more, is that the cost of leasing a reefer container is a bit more than an average container. If you’re leasing a reefer container and it incurs damage on the way, the liability will be really expensive to deal with. Insurance can come in handy in protecting yourself from such costs and conflicts.

You can easily insure your containers with Container xChange. As a member, you can choose the right insurance plan in just a few clicks. You have the option to add a damage protection plan, total loss plan, or a container damage plan to your subscription.

Insuring your reefer container for damage or loss
Let’s take a detailed look at the plans offered by xChange to insure your containers. This will help you choose the right insurance based on your needs.

Damage protection plan (DPP)
This plan helps you compensate for the usual maintenance and repair of your container. DPP is agreed upon between the supplier and user. It’s the supplier that pays the repair costs up to the agreed DPP amount. Any repair costs exceeding it are paid by the user.

However, if you become an xChange member and opt for insurance, it will cover anything over and above DPP. This plan is also helpful if you don’t want to go through the process of damage assessment every time.

Total loss insurance
Shipping containers may disappear into thin air. They may fall off the ship or get stolen. It’s unfortunate but it happens. You want to be insured so you can cover the cost of the container.

Our total loss insurance plans help cover the costs and can be taken out in addition to the DPP plan. It insured constructive total loss, general average, and mysterious disappearances.

Premium insurance
If you wish to cover all your bases, container damage insurance is the one for you. It includes total loss insurance and free IICL6 — an inspection of your containers. In this plan, xChange will take care of the entire insurance process. This will give you more time to focus on your business rather than worrying about your containers.

Reefer container repair solutions with xChange
Apart from the plans we’ve discussed above, you can also get repair cover for your boxes. You can opt for this if you do not have insurance in place but your reefer container has incurred damage.

In this case, the amount is settled directly between the supplier and the user of the container. xChange offers support to settle the damage costs. Once the repair plan is agreed upon, the charges or credits are automatically settled through the xChange wallet.

It’s a great way to streamline your repairs. At xChange, we mediate the process to help our members. It protects the users from old damages that they aren’t responsible for. It also helps the suppliers get reimbursement for the repairs.

You can read more about the repair claim process here.

Reefer container repair claims with Container xChange
After reading about the damages and cost of repairs, we’re certain you’d want to insure your boxes.

With xChange, the process couldn’t be simpler. If you’re a member, you can opt for the insurance with just a few clicks. All you need to do is decide which plan suits you. You can contact us anytime and our team can help you in choosing the best plan.

Claiming for repairs and damages with xChange is simple, quick, and streamlined. You no longer need to waste your time on long phone calls or emails to track your case.

Ready to secure your boxes? Click below to talk to our experts to know about these plans in detail. They’ll tell you about the pricing and answer all your doubts.

Reefer container repair: Common FAQs
Can reefer containers be repaired?
Yes, reefer containers can be repaired. In fact, reefer containers need regular repair and maintenance to help them remain in their optimal conditions. Some common repairs include rust removal, floor repair, and compressor repairs.

Do you need to repair your reefer containers?
Yes, you need to repair your reefer containers regularly as they’re prone to wear and tear. Repairing reefer containers can help in maintaining the ideal temperature, pressure, and humidity in the container. It can also increase the shelf life of the reefer container itself.
Source: xChange Solutions GmbH

The nascent seaborne hydrogen trades are set to cross the Atlantic. Germany, which has been scouring the globe for new sources of energy in the six months since Russia invaded Ukraine, has signed a hydrogen supply deal with Canada.

Canadian prime minister Justin Trudeau and German chancellor Olaf Scholz signed a five-year hydrogen accord on Tuesday in Newfoundland and Labrador on Canada’s east coast. The two countries will create a transatlantic supply chain for green hydrogen this decade, with first deliveries aiming for 2025.

Scholz said Canada “has almost boundless potential to become a superpower in sustainable energy and sustainable resource production.”

To date, Japan’s Kawasaki Heavy Industries has been the only company to develop and operate liquefied hydrogen carriers, with a new route taking the gas from Australia to Kobe. Kawasaki Heavy is working on developing larger hydrogen carriers as are many other shipbuilders in Asia.

Source: https://splash247.com/germany-to-import-hydrogen-from-canada/

In June, President Joe Biden spoke by phone to several traders and farmers highlighting the impact of rising shipping costs and how they were affecting businesses. Biden went on to castigate shipping companies for hiking prices and promised to take an action, aimed at reducing the cost of inflation.

Biden was only the latest in a growing number of critics citing the staggering profits of the large shipping companies over the past two years. With companies such as Maersk reporting the largest profit ever in 2021 for any Danish company the focus on profits has continued. While most of the focus was on how the companies were making staggering profits as long-term contracts and spot freight rates jumped to exorbitant levels, some commentators started to focus on the taxes paid by the shipping companies.

For a long time, shipping companies have enjoyed favorable tax terms. The carriers are taxed based on their tonnage, referred to as tonnage tax, which is different from the normal corporate tax system.

Thus, in most instances, many shipping carriers pay no corporate income tax. But even in situations where the corporate is charged, it is still way below that of other sectors. For example, the average corporate income tax of bulk carriers is 6 percent and just 3 percent for the tanker sector, which if contrasted with the 27 percent charged to freight forwarders appears outrageous.

However, since the pandemic began, the shipping industry has become lucrative. The ocean carriers are now moving massive volumes of cargo while at the same time posting eye-watering profits. Estimates for 2021 set the profits for the industry anywhere between a low of $110 billion to $150 billion or even $200 billion.

As a result, the discourse to reappraise the carriers’ tax regime is growing. Taking note of the matter, Sea-Intelligence in its weekly report said the present tonnage tax system creates a risk for big shipping players.

“The problem for the carriers right now is that the disparity between their present profits and their low tax rates has become extreme,” wrote the analysts at Sea-Intelligence. “Add into the mix that the carriers are politically seen as being part of driving inflation, even though not to the degree that some might believe. Add on top of that the very real emotional impact…that in the middle of a continuing supply chain crisis, the providers of exceedingly unreliable services are seen to profit like never before.”

With Maersk posting a profit of $8.6 billion and Hapag Lloyd $4.4 billion for Q2 2022, Sea-Intelligence goes further to predict that the political headwind against the carriers is poised to increase.

In the case of Maersk, they are going to pay $164 million in taxes for the second quarter of 2022. This is a rate of 1.8 percent. Hapag Lloyd is going to pay $20.9 million, meaning an effective tax rate of 0.5 percent.

Confronted by a sagging economy and soaring inflation rates, some French politicians were the first to take on the issue proposing a 25 percent windfall tax on the “super profits” earned by the domestic carrier CMA CGM, along with other French giants including TotalEnergies and Engie. According to the lawmakers, the windfall tax money would have helped to fund measures aimed at protecting consumers’ purchasing power.

CMA CGM’s CEO Rodolphe Saade argued with the politicians saying they needed to look at the company’s competition and the financial disadvantage they would be placed under with the windfall tax. In the end, CMA CGM and Total, both agreed to reduce prices for French customers to avoid the tax.

Globally politicians in the developed world have pushed for the first global minimum tax on multinational corporations. While some analysts agree that there is a need for a global minimum corporate tax, especially applicable to the big ocean carriers, some caution that a wrong political answer to the tax question could have a devastating outcome.

Unlike other industries, ocean carriers’ business model is quite volatile and depends on a range of factors spread across the world. Further, there is global pressure on the shipping industry to invest large sums to address emissions and achieve decarbonization of a sector that many considered one of the most difficult to decarbonize. There are already reports showing the shipping market may start to contract in 2023, meaning the revenues might fall before a consensus on the tax issue is reached.

Ship design for CO₂ carriage is evolving rapidly with yards exploring various ship sizes and different pressure/temperature capabilities. While only a handful of small vessels have been ordered to date, there are strong indications that demand for CO₂ carriage will grow. Interest in the sector during Q2-2022 has outstripped even our expectations, but this interest is creating exaggerated demand, leading to confusion and price inflation. In this article we examine recent market movements for liquid CO₂ carriage and look ahead at what we might expect as the market matures.

Can we expect CO₂ carriage to grow significantly?
Yes, given the current drive to reduce CO₂ emissions, this is likely.

Will many more CO₂ carriers be contracted?
Almost certainly. What is less certain however is the number, size and design of these vessels as this will depend on firm projects being realised. The diversity of size/design requirements for CO₂ carriage and the costs involved means speculative orders are unlikely. Instead, we anticipate vessels being ordered against firm, long-term projects.

What is the current market situation?
Carbon Capture and Storage (CCS) with a shipping element, is still at an evolutionary stage. The impetus comes from industrial companies, often driven by engineering and upstream divisions. Shipping strategy has not evolved in the same way it has in established liquid gas trades, resulting in a number of unknown factors and a lack of experience. For the time being, the market may continue to be confusing and unstructured despite the significant investments being contemplated.

What is the solution to this?
Over time yards will gain experience as to how best to field CO₂ enquiries. It seems likely that initially, only a small percentage of enquiries may result in orders with significant wasted resources. In time however, the industry will be better understood and become more efficient. For now, yards may be reticent to engage in CO₂ carrier enquiries compared to their willingness to handle those for more established gas ship designs.

What is currently happening with CO₂ vessel design?
Virtually all the major shipyards in China, South Korea and Japan are working on CO₂ vessel designs. These range from 4,500 CBM right up to 70,000 CBM capacity and are at various stages of advancement. Clarksons is closely following the evolution of design specifications and prices. Please contact us if you’d like to hear more.

What CO₂ vessels have been ordered?
Over the last few months the number of enquiries has increased significantly, particularly in the range of 12-20,000 CBM. Several projects have been announced, which are at various stages of discussion, however only two firm orders have reportedly been placed to date, namely:

Where is the demand coming from?
Q2-2022 has seen a surge in demand. To our knowledge, the number of firm projects has not grown since February of this year so where has this increased attention come from? Northern Lights Phase 1 already has two vessels on order at Dalian, however Northern Lights Phase 2 invites CO₂ emitters to place their CO₂ within an expanded sequestration facility in Norway. It is this which we believe is creating at least some of the additional enquiries.

Why does an individual project create so much perceived demand?
CO₂ trade starts with the receiving sites, the Northern Lights terminal in Norway being a prime example. Sites like these (or at least those ready to receive CO₂ in the near future) are limited. Far less limited are the potential loading sites within Northwest Europe which could vie to place their emissions to Northern Lights (and other sequestration sites going forward).

Most loading sites are intended to be collection hubs for multiple industrial emitters. Given the significant investments required in order to capture, liquefy, collect and store the CO₂ at the loading port, emitters tend to work together in joint initiatives. This makes sense given the logistical and technical challenges of bringing emissions from several industrial points into one place for loading on ships, at scale.

Let’s take, for example, a single sequestration site, which has limited capacity to receive CO₂ shipments. It is used by many emitters from various locations around Europe which, together, are capable of fulfilling the sequestration capacity many times over. Consider that each of these emitters is making shipping enquiries with multiple prospective shipowners and you begin to see how a single sequestration project which could only realistically utilise around four ships, could be generating enquiries for up to forty ships.

Why is that a problem?
Multiple yards in Japan, Korea and China have done significant work on CO₂ ship design, encouraged by several owners who are interested in being ‘first movers’ in the sector. However, the designs vary significantly in terms of capacity and cargo technology (including pressure and temperature).

Yards are understandably looking to protect their designs by only releasing them under a signed NDA against named projects. For specific sizes of vessels, there may only be three or four yards with designs which are advanced enough to take orders within specific time frames.

The problem arises when those yards receive multiple enquiries from different buyers which originate from the same project, far outstripping the underlying requirement. This can create confusion with the artificial demand leading to upward pressure on pricing. It can also stifle the yard’s appetite to advance the existing design.

Is that happening already?
Yes, from what we understand, there are already many firm enquiries with the yards so we do therefore appear to be at that stage.

What has been the response from yards and how can Clarksons help?
Yards are likely to engage their (limited) design capability with those owners who have the most compelling story and/or those with whom they have a strong track record on other sectors. This is where Clarksons can help. Our long-standing experience and involvement with yards enables us to connect the appropriate stakeholders together on a project-by-project basis, preventing unnecessary noise and avoiding inflated demand.

What will the trade look like 10 years from now?

As you may imagine, this is difficult to predict but trade evolution is likely to follow a pattern similar to the below:

What are Clarksons doing about CO₂ carriage?
Clarksons Gases is firmly established at the heart of the global gas markets with an unrivalled track record in providing shipping and trade-related services for LPG, ammonia, petrochemical gases and LNG. As part of our commitment to becoming equally proficient in the emerging, seaborne CO₂ business, we have formed a specialist team, within Gases Department. The team is working closely with the Clarksons Green Transition, Carbon and Research teams to ensure we remain at the forefront of developments in the sector. We are already assisting several parties on CO₂ projects and welcome your enquiry to find out how we can help you. You can contact us here.

Your partner through the green transition
Our team of experts are here to help guide, shape and execute your green transition strategy. Whether it is future fuels related, understanding your carbon footprint, getting closer to regulatory requirements, how offsets work or simply improving your day-to-day chartering activity, a conversation with our Green Transition team is a great place to start.
Source: Clarkson PLC (https://www.clarksons.com/home/news-and-insights/2022/liquid-co2-carriage-by-sea-market-movements/)