Shaffe, the Southern Hemisphere Association of Fresh Fruit Exporters, has said that it remains 'deeply concerned' after the announcement by several shipping companies to increase freight rates as of 1st January 2013.
The organisation noted in a statement that while commercial issues needed to be negotiated and agreed on at company level, a collective perspective would show the impact the increased rates will have on the fresh produce business.
'Shaffe members are exporting on an annual basis around 8.7m tonnes of fresh fruits overseas – the vast majority is by seafreight,' the group said. 'Considering the increase in shipping rates by up to US$1,500 or around 30 per cent per container would mean a total added cost for the Southern Hemisphere fresh produce industry up to US$650m.
'Bringing it down to the individual level, this could mean as much as an US$1.50 increase per 18kg box of fruit delivered to destination,' the group continued. 'With an indicative value for fruit of US$1.00 per kg, this increase would mean an average 8.3 per cent addition to the total product cost for the bulk of the shipped fresh produce. This could lead to, for example, an 11 per cent increase on total value per carton of apples, a 10 per cent increase on total value per carton of citrus, or a 4.5 per cent increase on total value per carton of grapes.'
Any significant increase in rates would severely impact on the sustainability and competitiveness of the fresh produce industry, the group explained, and would be even more detrimental for smaller operators.
'The rate variation is abrupt and has far reaching implications for the sector with limited time to react, adapt to these increases and have them absorbed at once by the supply chain down to consumers.'
The international supply of fresh produce, particularly off-season fresh produce originating in the Southern Hemisphere countries represented by SHAFFE, could be severely hit, Shaffe warned.
'The Association therefore calls on container shipping lines to reconsider their rate increases which ultimately endanger the long-term sustainability of the Southern Hemisphere fresh produce industries.'
