At the second day of the Cool Logistics conference in Antwerp yesterday, CEO of Maersk, Soren Skou announced that from January 2013 the cost of shipping a 40ft container would increase to $1500. This would mean a 30% rise on a global scale.He called the increase "significant", saying, "We can not continue to take out costs or build ships, as we have come come as far down that road as we can come, now we need to put prices up to counter some of the huge increases on the fuel costs."
He went on to say that it was not a decision which was taken lightly, but it was what the company needed to do to provide returns and invest in the future of the reefer business which continues to grow.
When asked where this amount came from he said that every aspect of the business had been looked at and this was what it would take to make a reasonable return.
What will this mean for grower's returns?
Thomas Eskesen, Global Head of Refrigerated Business at Mearsk explained that growers have been squeezed and will need to increase their prices. But as this is a global increase it will be be the same for all growers, "growers worldwide will face increases so individual growers/exporters can go with confidence to supermarkets and ask for more." In the end it seems the consumer will pay a higher price for fresh produce.
As for the timing of the announcement Mr Skou explained it was to give customers time, and not just spring it on them, "telling them now and not in December will give customers time to react, find alternatives or price this rise into their profits, which is what we hope they will do."
Earlier in his presentation Mr Skou outlined that the shipping industry needs major investment if it is to keep up with the growth of reefer volume in the next 3 years, he stated that around 50,000 40ft containers would be needed, costing 3.5 billion dollars, there would also be costs to replace containers which will be out-fleeted and ship capacity would have to be increased, a total of 7-8 billion dollars would need to invested, Mearsk would need to fund 25% of that.