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USMEF South American Expo (Click to download PDF form)

Asian Trade  

Rate Increase On Trans-Pacific Meat Shipments To Begin In July 2003

Shipping lines that transport beef, pork and poultry exports to Asia announced on December 13 a rate increase of $800 per 40-foot container from July 1, 2003. The Westbound Transpacific Stabilization Agreement (WTSA), which consists of the 12 largest shipping lines handling trade from the U.S. to Asia, said this rate increase will apply to all shipments from the U.S. Pacific coast to Asia for one year. Trade industry analysts estimate the cost to U.S. meat exporters will translate to about 2-2.5 cents per pound of meat exported to Asia.

The good news for U.S. exporters is the rate hike is voluntary for the 12 member carriers in the WTSA; individual carrier companies are free to negotiate their own rates in confidential contract negotiations with U.S. meat exporters. The WTSA itself has no enforcement powers over this rate increase.

The WTSA stated the rate hike was necessary because trans-Pacific carriers have experienced higher equipment and operating costs this year, and because freight rates in the westbound Pacific have dropped steadily over the past two years. 

The carriers also intend to raise their intermodal rates $1,000 per 40-foot equivalent unit (FEU). Intermodal rates apply to frozen and refrigerated meat moving from interior points in the U.S., as well as to cross-country mini-land-bridge movements. The carrier lines stated they will no longer provide free transfers of frozen poultry from container freight stations to vessels at West Coast ports.

Earlier this fall, the WTSA announced a series of rate increases of $600 per FEU to take effect by April 1, 2003, for other chilled products such as fruits and vegetables.