TSA carriers predict operating costs hike will top 7%

TSA carriers predict operating costs hike will top 7%    Transpacific Stabilization Agreement carriers, in the lead up to the next round of contract discussions, have forecast that the average operating cost of a typical eastbound voyage from Asia to ports and inland points in the United States, will increase more than 7 percent next year.
   “Cargo growth from Asia has placed intense service and cost pressures on container lines during the past year,” said Albert A. Pierce, TSA executive director. “They’ve added vessels, diversified routes, improved load planning in Asia to increase throughput at U.S. ports, and worked with customers to cover contingencies and meet tight delivery schedules, with no questions asked. At some point, however, carriers have to go back, add up the price tag for these efforts and begin talking about cost recovery.”
   The TSA carriers formulated the 7 percent operating cost rise by estimating increases of up to 25 percent to inland rail and trucking transportation costs, and 11 percent to basic empty container repositioning costs. The TSA said non-terminal container handling, Asia feeder ship service, maintenance and repair, staffing, information systems, and costs relating to the transpacific trade imbalance were also factored into the equation. Congestion-related costs or intermodal costs were not included in the West Coast port-to-port calculations, the TSA said.
   The TSA said it sees no more than a 3 percent to 4 percent gap between capacity and demand during 2006.
   “It’s an oversimplification to focus solely on ship capacity versus projected demand,” Pierce said. “Supply chain capacity is systemwide. We need to bring drivers back into the trucking industry; encourage railroad investment in locomotives, track and more efficient yards; add freight lanes to harbor area highways; and reconfigure port terminals to add throughput. Ocean carriers will be paying out for those and other improvements next year. They can’t cover the costs alone.”
   TSA members are APL, CMA CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Mitsui O.S.K. Lines, NYK, OOCL, and Yang Ming.