The 13 container liner companies in the Transpacific Stabilization Agreement's (TSA) 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.
After months of "uneven demand and gradually eroding freight rates in the
U.S.-Asia trade lane," the lines said it's time to begin
"reversing the trend," TSA said.
TSA noted 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.
TSA Westbound executive administrator Brian M. Conrad said there's an urgent need to begin rate restoration efforts in anticipation of fourth quarter cargo growth.
“Rates have drifted down even more than usual during the typical summer slack period, to unsustainable levels,” said Conrad. “Not only are we headed into the busiest time of year for the trade, but we are also seeing signs in the market that U.S. exports to Asia are poised for recovery in coming months.”
Conrad said lines view the $100-per-FEU general rate increase (GRI) amount as a minimum, given current rate levels.
“Anytime the lines undertake a GRI, they are mindful of the price sensitivity for many westbound cargoes and the need for an incremental approach in restoring rates,” he said. “At the same time we need to be clear that the recommended GRI will not, by itself, raise rates to levels that make an adequate contribution to round trip revenue.”
While the GRI is voluntary and will be implemented by lines individually according to their specific needs at this time, Conrad said transpacific carriers remain under considerable financial pressure in the current environment and will be looking at further opportunities for revenue recovery in late 2013 and early 2014.
TSA members include APL, China Shipping, CMA-CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk, Mediterranean Shipping Co., NYK, OOCL, Yang Ming, and Zim. - Chris Dupin