TSA lines plan further rate increases in 2004

TSA lines plan further rate increases in 2004    Container shipping lines of the Transpacific Stabilization Agreement said Wednesday that, anticipating a 'robust freight market' next year, they plan to implement further rate increases in the 2004-2005 service contract season.
   The discussion forum covering lines of the Asia-to-U.S. trade said it is recommending rate increases for dry and refrigerated commodities of $450 per 40-foot equivalent unit, and $600 per FEU for all-water shipments to the U.S. East Coast as well as transcontinental and inland point intermodal moves.
   TSA lines implemented rate increases of about $700 per FEU this year. The rate increase have helped member lines offset dramatic losses recorded in the 2002-2003 shipping, TSA said.
   The 2004-2005 rate increases, which member lines adopted at a CEO-level meetings in Kuala Lampur last week, are recommended to take effect May 1, or as contracts expire, TSA said. Most container cargo from Asia moves under 12-month service contracts with TSA lines that run May 1 through April 30.
   The discussion agreement also recommended a $400-per-FEU peak season surcharge to cover the period from June 15 through Oct. 31, 2004. TSA lines have implemented similar surcharges in years past to offset cost impacts of increased cargo and equipment imbalances and additional capacity to cover the peak periods.
   While cargo growth slowed during 2003, volumes are expected to improve faster than record levels seen in 2002, TSA said.
   TSA cited industry estimates that new ship capacity in the transpacific market will increase 7 to 9 percent, while cargo demand will rise 10 percent.
   'Right now, carriers are focused on getting beyond the cycles of rate increase and subsequent erosion that do not serve the trade's larger goal of stable, compensatory pricing,' said Albert A. Pierce, TSA's executive director. 'Their shareholders and lenders understand that container shipping is a long-term investment and a cyclical industry, but they still need to see a sustained return or they will put their money somewhere else.'
   Revenue improvements in other major trades have begun attracting vessels and equipment away from the Pacific trade as they are delivered,' Pierce said.
   TSA member lines are APL, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Sealand, Mitsui O.S.K. Lines, NYK Line, P&O Nedlloyd, and Yangming Marine.