Transpacific carriers brace for surge

Transpacific carriers brace for surge    Transpacific container carriers say they are bracing for a surge in peak season cargo after eastbound volumes in May were sharply higher than last year.
   The Transpacific Stabilization Agreement, a discussion agreement of 15 container carriers serving the Asia-to-U.S. trade, said internal reporting by its members “shows a 24.1 percent year-on-year increase in traffic during the month of May alone to the U.S. West Coast, and a 30.8 percent increase in all-water shipments to the East and Gulf coasts via the Panama Canal.
   'Although the long-term economic outlook still remains unclear, carriers are now seeing a strong peak season surge that could last for some months' said Y.M. Kim, president and chief executive officer of Hanjin Shipping Co.

Kim

   TSA said first quarter cargo demand from Asia to the United States was equivalent to 2.54 million TEUs, 13 percent more than in the first quarter of 2009 according to figures from PIERS.
   Although TSA said this was below comparable volumes in 2008, it “caught both container lines and their customers off guard, but carriers say they are now adjusting to what appears to be modest but sustained economic and trade growth through 2010.”
   'Now it appears that the worst is behind us,” said Eng Aik Meng, president of liner for APL Ltd. “Despite a pullback in U.S. job creation and retail sales in May, the pipeline of Asian exports to the U.S. is filling rapidly and consumers are more optimistic over job security and household incomes going forward.'
   Revenue remains a concern for the liner industry, which some analysts estimated lost $15 billion in 2009, TSA said.
   'Lines found themselves on the brink of failure last year, and it was a sobering experience,' Kim said. “After last year, no carrier is going back to operating vessels underutilized and at non-compensatory rates. Every sailing and every equipment turn will have to be economically justifiable.'
   He said more than ever carriers need peak season surcharges “to prepare for service contingencies and to meet schedule and delivery commitments on a sailing-by-sailing basis, and also to cover increased existing operating expenses, and the increased cost of capital.'
   TSA said “increases achieved in the current contract round still do not fully restore rates to the levels of late 2008, let alone provide for long-term viability and service expansion.”
   TSA said its member “acknowledged the difficulties many shippers have had going into second quarter 2010, with space and equipment availability in Asia, as a result of the unforeseen surge in cargo volumes. Lines have individually adopted a range of strategies to address these issues, including reinstatement of key service strings, deployment of    'extra loaders' — vessels added on a per-sailing basis to carry loaded containers to the U.S. and reposition empty equipment back — and have also noted the use by some shippers, of transloading to keep ocean containers close to port for quicker turns.”
   TSA members are APL, China Shipping, CMA-CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, “K” Line, Maersk, MSC, NYK, OOCL, Yang Ming and Zim.