WTSA to raise chilled vegetable rates
Container shipping lines in the Westbound Transpacific Stabilization Agreement have agreed on the need to raise freight rates for chilled 'vegetable all kinds,' or VAK, the carrier association said Monday.
Beginning May 5, WTSA carriers said they intend to raise VAK rates $300 per FEU and $240 per TEU. Chilled vegetable rates are tracked and adjusted separately from frozen vegetable rates. WTSA last increased VAK rates in May 2005. Since then, costs have increased significantly in the U.S./Asia freight market, particularly for service-intensive segments such as VAK.
Temperature-controlled equipment, WTSA said, is experiencing higher demand and shorter supply in the westbound transpacific trade, with a portion of the temperature-controlled container fleet having migrated to other trades since Asia cut meat and poultry purchases in 2003. Operating and maintenance costs for refrigerated equipment are increasing throughout the intermodal move from interior U.S. points. Westbound Panama Canal transit fees rose sharply last year, and a second stage increase is planned later this summer. Refrigerated backhaul opportunities from Asia are limited, further cutting into revenues.
WTSA is a voluntary association of 11 major ocean carriers in the transpacific trade.