In anticipation of stronger exports to Asia and limited refrigerated capacity, carriers in the westbound Pacific intend to increase their rates on beef, pork and poultry shipments $700 per 40-foot container effective July 1.
The 15 member lines of the Transpacific Stabilization Agreement Westbound section, said several factors on the ocean and land sides of the supply chain have come together this year to limit capacity in the reefer sector.
“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 railcars in the U.S. is driving inland intermodal demand for containers and generator sets,” said Brian Conrad, executive director of TSA-Westbound.
“Sustainable rates are critical to equipment availability in this environment,” he said.
Asia’s burgeoning middle class has created a growing market for quality beef, pork and chicken products from the U.S. The increased demand for frozen and temperature-controlled protein products has stressed supplies of reefer containers. Furthermore, premature scrapping of specialty refrigerated ships is driving more business to the container-shipping sector.
At the same time, most refrigerated rates for the protein cargoes are at their lowest levels in five years, Conrad said.
TSA Westbound is therefore announcing the $700 per-FEU rate increase early to provide adequate notice for shippers that typically book export sales 60 to 90 days in advance, he said.
The Journal of Commerce
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