AG SHIPPERS FACE RISING CARGO RATES
U.S. shippers of agricultural commodities are experiencing an increase in volumes to Asia, but rising refrigerated and dry cargo rates could diminish their returns.
Rates on dry cargoes, such as cotton and forest products, are firming, while rates for reefer exports have increased significantly. According to the U.S. Department of Agriculture’s Agricultural Marketing Service, reefer containers are in short supply and rate increases of 10 to 50 percent could be expected during the next six months.
Container rates on reefer and dry cargo agricultural had fallen significantly during the Asian economic crisis. From April 1997 to April 2000, westbound 40-foot reefer rates from the Pacific Northwest and Asia for apples fell from about $4,636 to $2,900 per reefer, or by 37 percent. During the same period, cotton rates declined from about $2,110 to $1,410 per container, or by 33 percent.
While Asia’s buying power is increasing, carriers still suffer from equipment imbalances. Carriers are also pressing for rate increases in the U.S. westbound trade to Asia.