US-ASIA BOUND REEFER FREIGHT RATES SET TO INCREASE
New York| 29 June, 2014
After
a 5 years stretch of lowest rates trading in the reefer container segment, the
Transpacific Stabilization Agreement (TSA) Westbound carriers have recommended
an increase in the Frozen Meat and Meat products shipments. This will see newer
rates being applied of US$700 per 40 foot container (FEU) increase in the
US-Asia trade route, beginning July 1, 2014.
The
increase has been brought about by a stronger 2014 for U.S. beef, pork and
poultry exports to Asia. A key concern among carriers as the peak shipping
season begins is ensuring an adequate supply of refrigerated and
temperature-controlled container equipment.
Increased
demand from a growing urban middle class in Asia is reopening markets for the
U.S. exports, at a time when refrigerated equipment has migrated to other
trades and is more costly to purchase and lease, and when freight rates do not
fully cover acquisition, maintenance and operating costs.
 |
| Maersk Reefer container vessel |
“We’re
seeing a perfect storm develop in the westbound transpacific refrigerated
segment,” said TSA-Westbound executive administrator Brian Conrad. “On top of
expected organic demand growth in Asia and normal competition for equipment
from other seasonal cargoes such as summer fruits, a shortage of refrigerated
rail cars in the U.S. is driving inland intermodal demand for containers and
generator sets. Premature scrapping of specialty refrigerated ships is drawing
equipment to north-south trades, particularly Central and South America.
Sustainable rates are critical to equipment availability in this environment.”
Conrad said
TSA-Westbound is announcing the guideline rate increase early to provide
adequate notice for protein shippers who typically book export sales 60-90 days
in advance.
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