Strong Asia-U.S. Cargo Demand, Tight Vessel Space Suggest Early Peak Season

By Patrick Burnson, Executive Editor
May 18, 2014 - SCMR Editorial

Transpacific container lines continue to experience a surge in eastbound bookings that began in January and is expected to continue into the second half of 2014, with vessel utilization in the mid-90% range via the West Coast and in the high-90% to full range to the East and Gulf Coasts.

To cover contingencies in the event of an earlier than usual peak season – diversifying port gateways, rerouting inland traffic, leasing extra equipment – member lines in the Transpacific Stabilization Agreement (TSA) have adopted a $400 per FEU peak season surcharge (PSS) for all shipments, effective June 15, 2014. Prior to the PSS, TSA carriers have recommended a guideline general rate increase (GRI) of US$300 per 40-foot container (FEU) to the West Coast and $400 per FEU to all other U.S. destinations, effective today, to further help offset rate erosion seen in recent months.

Both actions, TSA maintains, are separate from the group’s 2014-15 rate and cost recovery program for service contracts that are now being negotiated and come up for renewal on May 1.

“Carriers continue to play catch-up on rates, which have been effectively stagnant since 2011,” says TSA executive administrator Brian Conrad. ‘Modest revenue gains from recent GRIs will not be adequate to pay for upgraded services to meet likely demand surges in the coming months.”



About the Author

image
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).

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!

Recent Entries

When it comes to Congress actually getting its act together on a new long-term federal transportation bill, things remain as status quo as it gets, with the big takeaway being nothing really ever gets done, when it comes to passing a badly overdue and needed bill, rather than these band-aid extensions Congress keeps signing off on.

Truckload and intermodal pricing was up on an annual basis, according to the December edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

While the official numbers won’t be issued until early February in its quarterly Market Trends & Statistics report, preliminary data for the fourth quarter and full-year 2014 intermodal output from the Intermodal Association of North America (IANA) indicates that annual growth was intact.

Almost all companies today are aware of their labor or material costs... but what about energy consumption? It all comes down to having the energy data needed to determine what actions you must take to improve. The payoff is worth it, as insight into energy data allows you to make more valuable, relevant operating decisions.

With lower energy prices sparking domestic economic gains, coupled with solid manufacturing and industrial production activity, improving jobs numbers, and a GDP number that shows progress, there is, or there should be, much to be enthused about when it comes to the economy and the economic recovery, which has been raised and discussed and dissected from basically every angle possible, it seems. But that enthusiasm regarding the economy needs to be tempered, because big headline themes seldom tell the full story at all really.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.