TSA to increase East Coast peak season surcharges
Container shipping line members of the Transpacific Stabilization Agreement said Monday they are concerned that even a modest peak season in the summer and fall months will cause disruptions and have major cost impacts on their operations, particularly with regard to East Coast all-water shipments.
As a result, TSA members say they intend to phase in higher peak season surcharges in those market segments as the season progresses. A previously announced peak season surcharge of $400 per FEU for all Asia/U.S. cargo moving on TSA member line vessels will take effect June 15, but effective July 15, surcharges for all-water East and Gulf coasts moves via the Panama and Suez canals will be increased to $500 per FEU. On Aug. 15, those surcharges will be set at $600 per FEU through the remainder of the peak season period ending Nov. 15, unless further adjustments are required.
The peak season surcharge for U.S. West Coast port-to-port cargo, and for inland and mini-landbridge intermodal shipments, will remain at $400 for the entire June 15-Nov. 30 period.
“The industry expected Asia/U.S. cargo growth to moderate last year, and it exceeded even the most optimistic forecasts,” TSA Executive Director Albert A. Pierce said in a statement. “The trade has now seen four record years of mostly double-digit growth. Vessel space is still tight, terminal and rail improvements are still far from completion, equipment turn times are still slow and carriers are concerned; they’re not taking anything for granted.”
Pierce noted that first quarter container volumes from Asia totaled 1.4 million FEUs, up 9.8 percent from the same period in 2005, and China cargo was up nearly 15 percent. Post-Lunar New Year and post-Golden Week cargo levels have returned to normal following those holidays in Asia. Third quarter peak season Asia/U.S. traffic exceeded first quarter levels by 28 percent in 2005 and 19.9 percent in 2004.
An average of one in four containers moving through U.S. container terminals is an empty unit being repositioned, most as part of a transpacific round trip, with no revenue contribution toward repositioning costs.
“Customers tell us they want above all else service choice, schedule reliability and equipment availability,” Pierce added. “This a high-cost, high-stakes game for all of the parties involved. Shipping lines cannot afford to be caught unprepared.”