CARRIERS ANNOUNCE RATE INCREASES ON TRANSPACIFIC REEFER CARGOES
Container shipping lines serving the westbound transpacific trade said they plan to raise freight rates on high-value refrigerated U.S. summer fruit exports to Asia.
Member carriers of the Westbound Transpacific Stabilization Agreement have jointly adopted recommendations to increase freight rates for a range of refrigerated cargoes: cherries, stone fruit, grapes, prunes, plums and apples. The rate increases would take effect between May 15 and July 1, depending on the commodity.
The carrier group does not have the authority to set binding rates among carriers, but it can adopt pricing recommendations.
The WTSA agreement did not announce the amount of the proposed rate increases.
Guideline rates for cherries and apples will apply to service contract cargo, the carrier group said. Adjustments for stone fruit, grapes, prunes and plums will be established for tariff rates, with recommendations on maximum service contract discounts.
“A steady 15-month overall decline in refrigerated rates has created a disincentive to maintaining equipment and service in the transpacific trade,” WTSA said.
“Container lines have a clear and sizable financial stake in the refrigerated market segment,” said Albert A. Pierce, executive director of the WTSA. “These are high-value commodities that rely on expensive equipment and specialized handling, with zero tolerance for error. Pricing must reflect the value of that service, within a narrow seasonal window, tailored to each commodity,” he added.
In the coming weeks, carriers may also announce rate increases on other seasonal refrigerated commodities, such as citrus, melons and poultry, WTSA warned. They will also “consider specific adjustments” to cover late season grapes, apple shipments to Vietnam and Cambodia, and use of controlled atmosphere, modified atmosphere or other specialized equipment entailing higher costs and service levels, WTSA said.
The carriers of WTSA are APL, China Ocean Shipping Co., Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Sealand, MOL, NYK, Orient Overseas Container Line, P&O Nedlloyd and Yang Ming.
In March, the Westbound Transpacific Stabilization Agreement carriers withdrew a controversial plan to set pooled reefer market shares, in the face of probing questions from the U.S. Federal Maritime Commission and criticisms from shippers and intermediaries.