SHIPPERS “READY TO ACCEPT” HIGHER PACIFIC RATES

SHIPPERS “READY TO ACCEPT” HIGHER PACIFIC RATES

SHIPPERS “READY TO ACCEPT” HIGHER PACIFIC RATES

   As major transpacific shippers start their annual round of service contract negotiations with ocean carriers, both sides of the table are expecting rates to go up this year, after decreases in rates experienced in the last two years.
   A major shipper, who asked not to be named, said that rate increases in the Asia-to-U.S. trade are likely, but it is to early to know how freight rates in service contracts will compare with those in last year’s contracts.
   Ocean carriers said that they will be firm in this year’s negotiations.
   “The majority of contracts are being negotiated now,” said Bengt Henriksen, general manager of Unaffiliated Shippers of America. “It’s too early to say (how big the increases will be),” he commented.
   More than 50 percent of transpacific shippers renew their contracts on May 1.
   Henriksen and other sources dismissed as gossip reports that shippers have started to accept rates increases of $300 to $500 per container.
   Ocean carriers are asking for rate increases of about $700 to $900, depending on the destination point in the United States.
   “The intended rate recovery… is always subject to market forces,” said Peter Leng, senior vice president, transpacific at OOCL (USA) Inc. “We hope the actual increase will be very close to the intended number,” he added.
   Industry players expect the market to find a price equilibrium during the service contract negotiations in about mid- to late March.
   OOCL and other carriers say that they have seen early indications that the requested rate increases will stick.
   “Last year, the GRI (general rate increase) turned into a GRD (general rate decrease,” Leng commented, adding that this would not happen again this year.
   Carriers now have “a relatively strong stance” in negotiations, he commented.
   “We see clear signs that rates will increase,” said Michael Dietmar, assistant product manager, seafreight at Schenker. “We expect that freight rates will definitely go up,” he added.
   Although making a forecast now is difficult, Dietmar said that he would not be surprised if rates eventually increased by $200 to $300 per container.
   In a separate development, several carriers are starting to charge $25 per bill of lading for shipments to the U.S., following the introduction of more stringent cargo manifest rules.