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Transpacific carriers anticipate ?lunar new year? lull

Transpacific carriers anticipate ôlunar new yearö lull

   Container shipping lines in the Transpacific Stabilization Agreement (TSA) expect a February-March slowdown in cargo moving from Asia to the United States, following the traditional Lunar New Year factory shutdowns in Asia due Feb. 7-11.

   The lull will provide carriers with 'some breathing room to clear cargo backlogs at Southern California terminals and inland rail yards,' as well as 'time to drydock ships for routine maintenance and repair that have run nonstop during 2004,' the TSA said in a statement.

   'At this point, we're defining a 'slowdown' as 80-85 percent vessel utilization, perhaps falling briefly to around 70 percent in February and recovering a week or so later,' said Albert A. Pierce, TSA's executive director.

   'Thankfully, we're now down to only a handful of ships waiting at anchor for a berth on the West Coast, but longshore hiring and training issues are not fully resolved, and congestion problems are likely to resurface once demand rebounds,' Pierce said.

   Meanwhile, railroads have restricted intermodal traffic to Memphis and Dallas during January due to system-wide congestion. Also, recent storms have slowed routes from southern California to Las Vegas. 'A lot of freight still has to work its way through a clogged system,' TSA said.

   TSA said the transpacific lines expect a rebound in cargo demand in mid-to-late-February, given the Jan. 1 elimination of apparel quotas worldwide and a resulting expected transfer of related production to Asia.

   The Asia/U.S. container market posted cargo growth of 14.4 percent in the first three quarters of 2004 to 3.82 million 40-foot containers. Nearly 57 of that volume was shipped from China, the TSA noted. Even given the shift to all-water U.S. East and Gulf Coast services last year, West Coast ports still receive about 70 percent of container cargo from Asia to the United States.

   Because the January-February cargo lull had been anticipated and is expected to be of short duration, the transpacific carriers do not foresee any rate impacts during this period, Pierce added.

   TSA's members are APL, CMA CGM, COSCO Container Lines, Evergreen Marine Corp., Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, 'K' Line, MOL, NYK Line, Orient Overseas Container Line, P&O Nedlloyd and Yangming Marine Transport.

   For more information, see http://www.tsacarriers.org.