Members of the Transpacific Stabilization said they will seek further rate Eastbound rate increases in March and May, seeking to “build on the momentum” of a $300 per 40-foot container (FEU) general rate increase (GRI) that its 15 members recommended for Jan. 15.
In a press release the carriers announced plans for:
- A $300-per-FEU increase on March 15
- An increase on May 1 in an amount still to be determined
- An increase in 2014-2015 contracts of $300 per FEU from 2013-2014 levels for U.S. West Coast cargo and $400 per FEU for all other cargo. The vast majority of shippers have contracts that run from May 1 to April 30.
“Carriers have left a lot of money on the table in this market as partially successful increases have been eroded over time,” said TSA executive administrator Brian Conrad. “There is now a growing sense that pent-up demand, depleted retail and business inventories, and a greater overall sense of economic security are converging in 2014. Lines are determined not to miss that opportunity.”
TSA said transpacific cargo demand has posted steady growth coming off a healthy holiday season, and that the gains are so far reflected in freight rates. It said the Jan. 15 GRI was successful in increasing rates by $300 per FEU and “strong forward bookings suggest that the increase will hold through the important Lunar New Year period.”
The contract increase recommended this year is smaller than the one recommended last year by TSA lines for the May 1, 2013-April 30, 2014 contact year. Last year, the TSA said members were recommending an $800-per-FEU increase for cargo going to the West Coast; $1,000 for cargo going to the U.S. East Coast and Gulf Coast; and $1,200 for intermodal shipments via all costs.
The TSA has announced numerous GRIs in the past year:
- April 1, 2013: $400 per FEU to West Coast/$600 to other destinations
- July 1, 2013: $400 per FEU to West Coast/$600 per FEU to other destinations
- Aug. 1, 2013: $400 per FEU
- Nov. 15, 2013: $400 per FEU
- Dec. 20, 2013: $200 per FEU
- Jan. 15, 2014: $300 per FEU
Despite those recommendations, the TSA’s own revenue index, which tracks average revenue per FEU across TSA’s membership of 15 major container lines, changed little during the year, and was actually lower in November than it had been anytime last year.
Correction: A previous version of this story stated the $300-per-FEU increase would be imposed on March 1. The correct date is March 15.