Maersk reefer hike 'overzealous' and 'flawed', say African fruit growers

NEWS that Maersk and its unit Safmarine, were raising reefer rates US$1,500 per FEU won a chilly reception from citrus shippers at the Cool Logistics conference in Antwerp, where the increase was called "overzealous" and "flawed".

"There is no plausible explanation that warranted such an increase," said Citrus Growers Association of Southern Africa (CGA) chief executive CEO Justin Chadwick, who added his group and its members were drafting impact assessments

"On the South Africa-Europe trade lane, freight rates are considered sufficient to both realise a return on investment on equipment and generate a profit," Mr Chadwick said. according to London's Containerisation International.

But Maersk and Safmarine said that without the increase there could be no upgrade in equipment, thus putting South Africa's vital fruit sector at risk.

Maersk Line CEO Soren Skou told delegates that the hike represented a 30 per cent increase in prices globally, and added that the carrier might rethink its participation in the reefer trades if it didn't see better returns.

Mr Skou said that over the past seven years reefer rates had not been able to cover increases in inflation or bunker costs, and between now and 2015 the industry would need to invest US$3.5 billion in new equipment, which also would not be covered by current rates.

Nonetheless, Mr Chadwick expressed disappointment at Maersk's demand for renegotiations on cargo being moved before the January rate increase, and "unfair" bunker surcharges.

Citrus exporters have an increasingly limited choice when it comes to moving cargo as the specialised reefer shipping fleet is in short supply, with owners/operators assigning less capacity in the South Africa trades.