(The following is a reformatted version of a corrected press
release issued by the Transpacific Stabilization Agreement and
received via electronic mail. The release was confirmed by the
sender. This version corrects the date of the release.)
Transpacific Stabilization Agreement
FOR IMMEDIATE RELEASE
TSA LINES SEEK FURTHER REVENUE IMPROVEMENT WITH JULY 1 GRI
Carriers point to Q1 financial results, hope to build on
contract improvements, May individual gains.
Oakland, CA / May 28, 2013 - Transpacific container lines say
they intend to pursue further revenue improvement that is
essential if they are to achieve financial viability and
maintain service levels customers expect in the service-intensive Asia-U.S. market.
As a result, member carriers in the Transpacific Stabilization
Agreement are recommending a further guideline general rate
increase for all commodities in the amount of US$400 per 40-foot
container (FEU) to the U.S. West Coast and $600 to all other
destinations, subject to contract terms, effective July 1, 2013.
TSA executive administrator Brian M. Conrad said transpacific
freight rates are still not keeping pace with rising costs, and
a meaningful increase from current levels is essential to
achieve profitability for the benefit of the trade.
“The revenue issue is not going away,” Conrad insisted. “We have
to make the case repeatedly that short-term, off-season rates
cannot be extended for 12 months or longer in contracts, and
that new capacity entering the Asia-U.S. market reflects global
trends and an investment in productivity to meet future long-term demand. It does not somehow diminish service value and it
does not justify moving cargo at unsustainable levels.”
Despite modest revenue gains in 2013-14 service contracts and
subsequent increases taken by individual carriers in May, Conrad
explained, rates remain well below target levels needed to
maintain profitability and invest for future growth. Conrad said
increases to date are partly offset by rising port charges,
labor and inland transportation costs in both the U.S. and in
Asia, including recent wage increases for East Coast and Hong
Kong longshore workers, higher Suez Canal costs and higher rail
and truck rates for inland equipment repositioning.
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. More information on TSA can be found at
Contact: Niels Erich T: 415.525.4520
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