U.S. West Coast exporters may face ocean cargo rate hike
WTSA executive administrator Brian M. Conrad emphasized that successive rate adjustments taken in recent months have been modest
in the NewsState of Logistics 2016: Pursue mutual benefit Medical device manufacturer uses automation and shelving to improve its working environment Device improves ergonomics on the pick floor for Capital Candy American Plumbing & Heating’s new mezzanine improves workers’ safety Multi-level mezzanine system provides superior strength and stability More News
Container shipping lines in the Westbound Transpacific Stabilization Agreement (WTSA) are recommending a further round of incremental rate increases to dry and selected refrigerated commodities, as part of a comprehensive rate restoration effort throughout 2012.
The adjustments, scheduled to take effect on May 15, 2012, will raise dry commodity rate levels by $50 per 40-foot container (FEU) from Pacific Southwest ports (Los Angeles, Long Beach and Oakland), and by $100 per FEU for all other cargo, moving via all-water or intermodal service from Pacific Northwest ports, from inland U.S. points and from the U.S. East and Gulf Coasts. In addition, WTSA lines are recommending increases of $200 per FEU to refrigerated rates for French fries, frozen vegetables and miscellaneous refrigerated cargoes not covered under commodity-specific programs, for all origins and Asian destinations.
WTSA executive administrator Brian M. Conrad emphasized that successive rate adjustments taken in recent months have been modest and aimed at incrementally restoring rates in the trade to compensatory levels after a period of significant erosion. He added that the diverse and often seasonal nature of westbound traffic makes it necessary to adopt multiple increases for cargo moving under contract throughout the year.
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.”
WTSA is a voluntary discussion and research forum of 10 major ocean and intermodal container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia.
About the AuthorPatrick 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!
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