Member lines in the Transpacific Stabilization Agreement (TSA) are seeking an across-the-board general rate increase (GRI) on all dry and refrigerated cargo effective April 1, 2013 to raise freight rates above compensatory and ensure that 2013-14 contract rates “contain meaningful net increases relative to 2012 contract levels.”
The container shipping lines said in a statement they “want to shore up rate gains made to date as they look ahead to the post-Lunar New Year shipping period and as 2013-14 service contract negotiations intensify.”
The proposed GRI is US$400 per 40-foot container to the U.S. West Coast and $600 per FEU to all other destinations, said TSA, a research and discussion forum of major container shipping lines which operate from Asia to the U.S.
“The week-long Lunar New Year factory closures in Asia tend to pull forward spring shipments, especially among retail customers,” explained TSA executive administrator Brian Conrad.
“This translates into slowing cargo demand after the holidays, and is one of many such inflection points that can erode revenue throughout the year. Carriers are committed to keeping market rates stable over the next 6 to 8 weeks, as the contracting season ramps up.”
Contract negotiations are expected to accelerate in the coming weeks, and Conrad said that while current market rates have improved, another year of longer term rates at 2012 contract levels—or with only minimal increases—is not sustainable.
“It is essential to carriers’ long-term viability that new contracts include rates that are more closely aligned with current market levels,” he said.
TSA members include APL, China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, Kawasaki Kisen Kaisha, Maersk Line, Mediterranean Shipping Co., Nippon Yusen Kaisha, Orient Overseas Container Line, Yangming Marine Transport, and Zim Integrated Shipping Services.