TP Pulse: Many shippers, 3PLs expect rate increase this year

   Participants in the latest installment of American Shipper‘s quarterly survey on developments in the transpacific container trade, TP Pulse, expect freight rates to increase or remain stable in the coming year.
   During the past week, 120 readers took part in the seven-question online survey, including 61 shippers and 37 third-party logistics services providers.
   About 43 percent of the participants said they expect rates to increase moderately or significantly in coming weeks as negotiations on service contracts for the May 1-to-April 30 contracting year, common in the transpacific trade, kicks into high gear. About 24 percent said they expected rates to remain stable and 24 percent anticipate moderate or significant decreases.
   About 48 percent of large shippers, those moving than more than 2,000 containers, and 46 percent of 3PLs expect rate hikes, compared to about 37 percent of small shippers.
   Some 3PLs feel they have borne the brunt of general rate increases during the past year, a complaint echoed in the TP Pulse survey where about 36 percent of 3PLs said they experienced rate increases in the past month compared to 23 percent of small shippers and 16 percent of large shippers.
   Use of index-linked contracts has been proposed as a possible solution to rate volatility, but TP Pulse found only a small number of shippers are planning to use index-linked contacts this year – 12 percent of large shippers, 14 percent of small shippers, and about 17 percent of 3PLs. About a fifth of shippers and 30 percent of 3PLs are undecided about whether they will use index-linked contracts. Those that do have interest in indexed-linked contracts are more interested in contracts with a life of two years or less.
   The majority of shippers – 66 percent of small shippers, 64 percent of large shippers, and 53 percent of 3PLs – say slow steaming has affected their transpacific operations. – Chris Dupin