Box carriers on the U.S.-Asia export trade lane announced plans to impose gradual rate increases from early October as part of their attempt to raise freight rates that are currently hovering “at or near below-cost levels,” according to the Transpacific Stabilization Agreement (TSA).
Container shipping lines in the U.S. westbound section are recommending phased, across-the-board increases in freight rates beginning October 1, 2015, said an emailed announcement from the TSA.
“The scheduled action reflects the trade’s recovery from congestion challenges earlier in the year; a strengthening market heading into what is typically the trade’s peak season; and an urgent need to halt damaging rate erosion.”
Effective October 1, member carriers in the TSA’s Westbound section will be seeking to establish new target rates in all dry commodity segments that translate into modest increases in most cases, with higher proportionate increases for the most depressed rates.
TSA-Westbound lines say they expect to follow with similar, gradual increases in November and December.
“U.S.-Asia freight rates have fallen to historically low levels since the beginning of 2015 due to a strong dollar and unusually weak emerging market demand,” said TSA-Westbound executive administrator Brian Conrad.
“Current westbound rate levels in many cases do not fully cover costs. At best, they make only a nominal contribution to a round-trip sailing, and barely compete for space aboard ship with empty repositioned containers needed in Asia. Worse, at a time when westbound equipment is already in short supply, depressed rates encourage migration of containers to other trades.”
TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S. Members include APL, China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Evergreen Line, Hanjin Shipping Co., 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.
Photo: NickCPrior
