Transpacific shippers may face rate hike

Asia-U.S. container shipping lines comprising a major transpacific cartel see a strong summer ahead in terms of cargo traffic

By ·

Asia-U.S. container shipping lines comprising a major transpacific cartel see a strong summer ahead in terms of cargo traffic.

Cartel spokesmen say U.S. consumer spending and retail sales trends are on the uptick confirming carrier forward bookings.

As a consequence, member lines in the Transpacific Stabilization Agreement (TSA) are recommending a peak season surcharge (PSS) in the amount of $600 per 40-foot container (FEU) – and proportionate levels for other equipment sizes – to take effect June 10, 2012.

“The PSS is intended to cover extraordinary seasonal costs associated with anticipated cargo surges that can require leasing of vessel and equipment capacity, routing or schedule changes, special port terminal or inland transportation arrangements, added staffing or other measures to cover short-term contingencies,” said spokesmen.

The anticipated rate hike comes when many analysts say ocean carriers are have not been able or willing to contain fleet capacity.

According to Peter Friedmann, executive director of the Agriculture Transportation Coalition, the dynamics of ocean cargo have “flipped” dramatically. With U.S. exports growing by 5-6 percent annually, it’s only matter of time when carriers will reconfigure shipping schedules.
“But this does not mean they will bring in additional capacity right away,” he said. “Carriers will try to make rate hikes stick, but the clock is working against them.”

“The lines see a strong outlook for the coming months, with utilization already in the 95 percent range,” said TSA executive administrator Brian M. Conrad. “At the same time, they continue to dig out after a long period of serious financial losses, and want to be sure they are well-positioned to ramp up services as the trade rebounds.”


About the Author

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 [email protected]

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!

Latest Whitepaper
Supplier Relationship Micro Management
Optimizing Across Six Guiding Principles
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Women in Logistics: Breaking Gender Roles to Win the War for Talent
In this session you'll hear from a panel of women who are now leading top-level logistics and supply chain operations. The panel will share their success stories as well as advice for women who are now making their way up the ladder.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...