Agricultural shippers are questioning whether market conditions are such that a planned westbound rate increase announced by the Transpacific Stabilization Agreement (TSA) on Tuesday will stick, said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC).
Friedmann said Wednesday a number of agriculture exporters have told him they are skeptical that the market will support rate increases now, with one member saying, “We’ll see what happens. They only made one of these increases stick last year, and I don’t think the market is much different than last year – maybe even less with the changes in wastepaper trade. “
The 13 container liner companies of the TSA's Westbound section plan to raise freight rates on all commodities and from all U.S. origin points by at least $100 per 40-foot container (FEU) by no later than Oct. 1.
TSA further said a number of its members have already filed individual increases across the board or in in key market segments to take effect during September, and those will go forward as schedule. Other members are looking to an Oct. 1 effective date.
In the past, liner companies participated in two different discussion agreements - TSA, which had 15 lines operating in the eastbound transpacific, and the Westbound Transpacific Stabilization Agreement with 9 members. The two groups merged in April, meaning the number of carriers participating in westbound discussions jumped to include all 15 members, who move about 90 percent of cargo in both directions between United States and Far East.
Because of that Friedmann said the discussion agreement will be carefully watched by exporters. - Chris Dupin