The 15 container shipping lines that belong to the Transpacific Stabilization Agreement (TSA) said Tuesday they are recommending a $400 per 40-foot container general rate increase for cargo moving from Asia to the United States covering all origins and destinations, effective Nov. 15.
The move follows individual actions by several lines in the trade to raise their rates during October.
TSA said carriers are seeking to restore baseline freight rates for holiday shipments and the 2014 contract negotiating season beyond.
“The trade is seeing modest but healthy cargo growth over 2012, while cargo handling, equipment and other costs continue to rise and most carriers are operating at a loss,” said Brian Conrad, TSA executive administrator, in a statement. “It makes no sense for rates to be at current levels, and it threatens the ability of individual carriers to maintain service levels heading into 2014.”
Conrad noted cargo volumes have risen steadily since mid-August and are expected to remain strong through mid-November when typical seasonal easing begins.
TSA also announced Wednesday that its Westbound section is recommending minimum rate increases by no later than Nov. 15 in key export commodities from the United States, stating it has "seen steady rate erosion in recent months.”
TSA’s Westbound section has adopted minimum guideline increases of $100 per 40-foot container via U.S. West Coast ports, $200 per 40-foot container via East and Gulf Coast ports, and $100 per 40-foot container for intermodal shipments, for six commodities – waste paper, metal scrap, plastic scrap and resin, lumber and logs, hay and agricultural products. In the case of waste paper, lines also adopted guideline minimum rate levels via California ports which may lead to increases above the minimum levels.
Conrad said the guideline for export commodities is intended to be flexible, reflecting actions already taken by some carriers in October and different carrier views on the levels of increase achievable in different lane segments.
“At the end of the day member lines are looking for increases of at least the levels in the guideline GRI,” he said. “Whether they achieve the goal by building on recent individual increases, and the extent to which they pursue GRIs beyond the minimum levels, will be guided by market conditions and each carrier’s strategic objectives.”
TSA members include APL, China Shipping, CMA-CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, “K” Line, Maersk, MSC, NYK, OOCL, Yang Ming, and Zim.
Maersk also announced a rate hike similar to the TSA recommendation this week.