The carrier proposed a US$1,500 pre-reefer rate increase
Israel's Plant Production and Marketing Board expressed deep concern over Maersk Line's proposed US$1,500-per reefer container freight rate increase, due to be implemented at the beginning of 2013.
Maersk Line announced last September that the world’s largest carrier is going to increase reefer rates 30% to an average of US$1,500 per FEU from January 1, 2013. The increase is to compensate the increasing production cost of producing reefer containers and the growing operation cost of reefer services.
The carrier noted that the level of reefer rates has been much lower than the growth of inflation and bunker costs in the past seven years, reflected in a two per cent annual increase of reefer rates, but a four per cent growth in inflation and 18 per cent surge in bunker costs.
In an open letter to Maersk Line chief executive Sרren Skou, Israel's Plant Production and Marketing Board called the proposed increase "disturbing" and "extreme". The letter which was sent on 1 November and signed by the board's general manager Zvi Alon, expressed fear at the long-term impact of the move on growers and shippers.
Alon noted that "The Israeli Plant Production and Marketing Board is deeply concerned about the application of a US$1,500 per reefer container freight rate from 1 January, which we find as very extreme,". He added that "The Board also finds it very disturbing that the two shipping giants Maersk and CMA-CGM had published the extreme rate increase simultaneously."
Alon also noted that "While the Board accepts that profitability is necessary for re-investment in equipment, it feels that shippers of reefer products are being discriminated.
The letter concluded by calling on Maersk to reconsider increasing rates, and instead enter negotiations with its customers. "We expect Maersk Line not to ignore traditional customer demands, and to reconsider its position,"