El Niño adds to an already stressed cold-chain ocean market

The El Niño weather pattern now throttling all cargo going through the Panama Canal will also have a big impact on the refrigerated container trade into North America and Europe, market experts say. As exports ready for the Southern Hemisphere harvest season, cold-chain cargo could face even more disruptions than dry cargo well into 2027.

North-south trades continue to overtake east-west trades in the reefer market, panelists said during the Journal of Commerce’s TPM Cold-Chain webinar Thursday. North America and Europe imported 1.49 million TEUs worth of refrigerated goods from Mexico and Central and South America in 2025, a 8.9% rise from 2024, according to data from Global Trade Analytics, a sister company of the Journal of Commerce within S&P Global.

The growth in trade from Latin America is offsetting slower east-west trades, said Philip Gray, senior associate at consultancy Drewry. Overall, the refrigerated containerized trade is growing at an annual average rate of 2.6%, Gray said. The trans-Atlantic trade is largely flat, he said, as is the trans-Pacific westbound trade in proteins due to China becoming a net exporter of pork and chicken.

“We can see how [the locations] where things are produced and consumed are changing,” Gray said.

In addition to fresh produce, South America is becoming a major source of beef for the US, said Grant Daly, who leads the North American cold-chain business for Maersk. Beef shipments from Brazil to the US grew 36% in the first quarter year over year, while Argentine beef exports rose 18%, according to the US Department of Agriculture’s Foreign Agricultural Service.

“One in six pounds of beef in the US now arrives from somewhere else,” Daly said. “The herds in the US are the smallest they’ve been in years and it’s the seventh straight year of declines.”

The growing dependence on the seaborne trade from the Southern Hemisphere will be tested this year by the El Niño weather pattern developing in the Pacific Ocean, Daly said. El Niño, which is now forcing ships crossing the Panama Canal to carry less cargo due to falling water levels, will also likely impact crop yields and where cold-chain shippers in the Northern Hemisphere ultimately source their goods.

“Weather is a big disruption to the supply chain, whether it’s El Niño affecting crops or low water affect the Panama Canal,” Daly said.

West Coast of South America at risk

The effects of the El Niño will not be fully felt until the start of 2027, when the Southern Hemisphere’s harvest season begins. S&P Global Market Intelligence said in a July report that based on current forecasts, El Niño effects are expected to peak during the fourth quarter of 2026 and the first quarter of 2027 before eventually tapering off throughout next year.

Under one scenario, South America could see cycles of droughts and coastal flooding that “threaten agricultural exports,” according to the report.

While some commodities such as corn and soybeans may benefit, rains and floods along the West Coast of South America could affect crop yields and lead to more delays for time-sensitive, refrigerated cargoes. Chile, Colombia and Peru are among the most vulnerable to a supply shock from El Niño, the report said. Drewry’s Gray said that region has become especially important for exports.

“[Trades] like West Coast South America to Europe have grown considerably over the last 25 years,” he said. “Russia has become quite an important market for fruits and vegetables, particularly from South America. West Coast South America to North America has grown 24% in five years.”

Daly said growth from Peru has been “significant” for North American refrigerated imports, adding that shippers need to consider contingency plans and alternate sourcing considering the potential weather disruptions.

“The impact from El Niño two, three years ago was also significant,” he said. “The demand doesn’t disappear; it just moves somewhere else.”

El Niño-related delays and disruptions will only add to existing pressures on cold-chain shippers, Drewry’s Gray said. Plug capacity for storing reefer containers remains limited, he said, as do other types of equipment such as chassis gensets for reefer containers.

Due to elevated fuel costs and strong overall container demand, reefer rates are at their highest in two years, Gray said. Drewry’s composite refrigerated freight index for the third quarter of 2026 is up 20% from a year earlier. For low-priced agricultural goods especially, freight rates will be a big factor in where products eventually go, he added.

“Rates are putting pressure, particularly on some of the lower-price commodities,” Gray said. “Not that it’s going to have a big impact on the final price to the consumer, but as a trader, you have to be competitive with your peers.”

This article was originally published by the Journal of Commerce on Aug. 20, 2026.