Report: Transpacific lines unlikely to achieve GRIs

Report: Transpacific lines unlikely to achieve GRIs    Transpacific container liner carriers are unlikely to achieve rate increases when contracts are renewed this spring, said Neil Dekker, editor of Drewry Shipping Consultants' Container Forecaster newsletter.
   “On the transpacific, on the contracting side, I can’t see the carriers getting anymore than they did last year,” said Dekker in a brief interview in Long Beach where he was attending the Trans-Pacific Maritime Conference, sponsored by the Journal of Commerce.
   “The GRI negotiations coming up in May — we think there is a bit too much capacity in the system. There are six new services coming and there will be cascading from the Asia/Europe trade as well. I can’t see utilization factors getting to be more than 90 percent. So carriers are going to have trouble getting their GRI through.”
   Last November member carriers in the Transpacific Stabilization Agreement said they would seek increases of $200 to $400 per TEU for eastbound container shipments to the United States in spring contract negotiations.

Dekker

   However, Dekker thought shippers might have better luck in imposing a peak season surcharge on carriers.
   Dekker thought a presentation during TPM by Y.M. Kim, TSA chairman and chief executive officer of Hanjin Shipping, was “talking the market up a little bit.”
   Kim said that while capacity on a year-over-year basis would be up 12.6 percent, for the peak season of August-October, capacity would be up a much more modest 7.3 percent.

Joo

   Tan Hua Joo, an analyst for Alphaliner forecast that year-over-year capacity will be up 14 percent and the capacity in the third quarter of 2011 will be 9.5 percent more than in the third quarter of 2010. He said capacity has to be more than 95 percent to trigger a rate increase.
   He said forward freight rates suggest the market does not believe 2011 rates will reach 2010 levels.
   Mario Moreno, an economist with the Journal of Commerce's PIERS service, forecast that eastbound transpacific TEU volume would increase 8.2 percent on a year-over-year basis and westbound by 11 percent.
   Dekker said carriers are likely to insist on surcharges that reflect the sharply rising price of oil, but there have been some reports of carriers in the Asia/Europe trade offering all-in rates without bunker surcharges.
   “That’s before the recent price spike, but any carrier doing that is going to be losing money,” he said. ' Chris Dupin