Transpacific container lines recommend freight rate increases
Container shipping lines in the Transpacific Stabilization Agreement (TSA) have recommended freight rate increases, effective in carrier tariffs and upon renewal of service contracts with shippers, by May 1.
The largest rate increases would be for all-water shipments from Asia to the U.S. East and Gulf coasts, a route regarded by shippers as better value for money than the landbridge route via West Coast ports.
For U.S. West Coast and 'Group 4' western U.S. shipments, TSA lines propose a rate increase of $285 per 40-foot container (FEU).
For inland-point intermodal and mini-landbridge crago, TSA lines recommend an increase of $350 per FEU.
For all water-shipments to the U.S. East Coast and Gulf ports via the Panama and Suez Canals, the proposed rate increase is $430 per FEU.
TSA carriers also recommend retaining a peak season surcharge of $400 per FEU applied to shipments from June 15 through Nov. 30, 2005.
Those planned increases 'cover only a portion of estimated rising costs,' TSA said in a statement, adding its carriers 'will consider further cost recovery measures in coming months as warranted.'
The TSA lines said aggregate operating costs in the Pacific will increase in 2005 by 'at least 11-12 percent, depending on route and transport mode.'
While lower than the rate increases sought by Pacific carriers last May, the proposed rate increases for the 2005-2006 season would be the third cumulative round of annual increases in the eastbound transpacific trade.
Port and inland congestion 'in the U.S. and Asia, and delays moving through the Panama Canal, have only made the situation worse,' TSA said.
Shippers at U.S. ports 'are experiencing delays of five to seven days getting cargo delivered as vessels sit idle at anchor,' TSA noted. 'Ripple effects have, in turn, been felt all the way back to Asia as ocean carriers are forced to skip port calls, reduce time in ports, advance the cutoff times for receiving cargo, and in some instances reschedule loading of empty equipment or non-linehaul cargo to maintain service levels and schedules.'
TSA also said 'marked increases in bunker fuel costs, due to rising worldwide fuel prices and operational changes, are likely to be reflected in higher bunker surcharges in 2005.'
TSA is a voluntary 'discussion and research forum' of 13 container shipping lines. Members are APL, CMA CGM, COSCO Container Lines, Evergreen Marine Corp. (Taiwan), Hanjin Shipping Co., Hapag Lloyd, Hyundai Merchant Marine, 'K' Line, MOL, NYK Line, Orient Overseas Container Line, P&O Nedlloyd, and Yangming Marine.
For more information, see http://www.tsacarriers.org.