Transpacific Stabilization Agreement to raise rates in 2011

“It is unfortunate that this is being done before there can be any change to the Shipping Act,” said Michael Berzon, out-going chairman of the National Industrial League’s (NITL) ocean cargo committee.

By ·

Ocean carriers comprising the Transpacific Stabilization Agreement (TSA) have announced that rates will be hiked by a significant margin next year.

According to cartel spokesmen, “suggested” rate increases of $400 per 40-foot container (FEU) for cargo moving to U.S. West Coast ports and $600 per FEU for all other cargo are likely to be imposed by May 1, 2011.

“It is unfortunate that this is being done before there can be any change to the Shipping Act,” said Michael Berzon, out-going chairman of the National Industrial League’s (NITL) ocean cargo committee.
“Carriers can raise rates in lockstep now, without any concern that such behavior represents a violation of anti-trust laws.”

TSA lines have further recommended full recovery of costs for other equipment sizes, and improved collection of floating bunker and inland fuel charges as well as Panama Canal, Alameda Corridor and other fixed accessorial charges.

This comes at a time when the cartel admits that it has had “healthy revenues” over the past two quarters. Still, they say, an early end to the transpacific peak season has left that trade lane lagging relative to other Asia container markets, while operating costs continue to rise.

Carriers called for adjustments to store-door delivery rates as warranted, to levels that adequately compensate carriers for rising costs in providing those services. Finally, TSA is recommending a peak season surcharge of $400 per FEU, effective from June 15, 2011 through November 30, 2011, with those dates subject to adjustment based on changing market conditions.

As reported in LM, the NITL maintains that the current U.S. shipping regulatory system today does not work in the best interests of U.S. businesses that are required to compete in the global market. The League said H.R. 6167 was an “appropriate” first step toward achieving a more robust, competitive and efficient maritime industry. It also added that the bill, “seeks to address recent problems faced by importers and exporters in enforcing service contract obligations in a timely and cost effective manner.”

Berzon said in a subsequent interview that with a “lame duck” Congress, there is scant chance that such legislation will be enacted this year.

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!

Article Topics

Container · Exports · Imports · NITL · Shipping · Trade · All Topics
Latest Whitepaper
Efficiency improvements in Track/Trace Enhances Customer Loyalty
Consumer satisfaction with the quality of your products is clearly important, but the service you provide before and after the sale is equally important to any business, but often overlooked as benefiting the bottom line.
Download Today!
From the October 2016 Issue
Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction?
Badcock Home Furniture &more: Out with paper, in with Cloud TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
How API Technology Connects the Transportation Economy
Dynamic decision making is made possible through accurate, actionable data. When combined with progress in data science and the Internet of Things, technology companies that add value to direct-to-carrier APIs and combine them with high-power data analytics will create new concepts for the information economy.
Register Today!
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...

2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...