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
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...