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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 Patrick Burnson, Executive Editor
May 08, 2012

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 .(JavaScript must be enabled to view this email address).

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