Subscribe to our free, weekly email newsletter!


The Westbound Transpacific Stabilization Agreement loses APL

The Westbound Transpacific Stabilization Agreement (WTSA) is losing another member, as APL Ltd. announced its withdrawal effective September 1.
By Patrick Burnson, Executive Editor
August 27, 2012

The Westbound Transpacific Stabilization Agreement (WTSA) is losing another member, as APL Ltd. announced its withdrawal effective September 1.

Remaining members comprise Hapag Lloyd, COSCO, K Line, Evergreen, Hanjin, Yangming HMM, OOCL and NYK.

APL spokesmen in Singapore indicated that cost of membership was not justified in the current “overcapacity” marketplace.

WTSA executive administrator, Brian M. Conrad told LM in an interview that demand will eventually rise and come into line with supply.

“Most estimates show that happening in the next 2-3 years. The question is how effectively carriers will manage assets and pricing in the meantime.”

Conrad added that the WTSA does not influence or manage vessel capacity decision making – that is a function purely for individual carriers based on their internal economics and objectives.

“That said, capacity imbalances have existed in global trade lanes for centuries. It is an inevitable condition of the industry,” said Conrad. “Scheduled carriers invest in ships and equipment over a 25-year time horizon while their principal revenue stream is freight rates based on 90-day bookings and 12-month contracts.”

Conrad added that recent decisions to purchase ships and container equipment are based on long-term economic and competitive factors – expanding global trade, high fuel costs, pursuit of lower slot costs through scale – along with external considerations such as favorable shipyard terms, cost of capital and exchange rates.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When it comes to Congress actually getting its act together on a new long-term federal transportation bill, things remain as status quo as it gets, with the big takeaway being nothing really ever gets done, when it comes to passing a badly overdue and needed bill, rather than these band-aid extensions Congress keeps signing off on.

Truckload and intermodal pricing was up on an annual basis, according to the December edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

While the official numbers won’t be issued until early February in its quarterly Market Trends & Statistics report, preliminary data for the fourth quarter and full-year 2014 intermodal output from the Intermodal Association of North America (IANA) indicates that annual growth was intact.

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

Article Topics

News · Ocean Freight · Ocean Cargo · Trade · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA