(The following is a reformatted version of a press release
issued by Transpacific Stabilization Agreement and received via
electronic mail. The release was confirmed by the sender.)
Transpacific Stabilization Agreement
ASIA-U.S. LINES CONTINUE REVENUE PUSH, BUILDING ON STRONG LUNAR
NEW YEAR DEMAND
January GRI secures $300 per FEU; TSA announces further
guideline increases for March and May, along with new 2014-15
Oakland, CA / January 28, 2014 - Transpacific cargo demand has
posted steady growth coming off a healthy holiday season, and
container lines serving the Asia-U.S. trade lane say the gains
are so far reflected in freight rates.
A January 15 general rate increase (GRI) taken by member lines
in the Transpacific Stabilization Agreement (TSA) has added an
average US$300 per 40-foot container (FEU) to rate levels.
Strong forward bookings suggest that the increase will hold
through the important Lunar New Year period, TSA says, and lines
intend to build on the momentum with another $300 per FEU
increase, effective March 15, and a further May 1 increase
separate from rate adjustments planned for 2014-15 contracts.
“Carriers have left a lot of money on the table in this market
as partially successful increases have been eroded over time,”
said TSA executive administrator Brian Conrad. “There is now a
growing sense that pent-up demand, depleted retail and business
inventories, and a greater overall sense of economic security
are converging in 2014. Lines are determined not to miss that
At the same time, TSA also announced its 12-month revenue and
cost recovery program for 2014-15 contracts, which recommends
increases to contract rates of $300 per FEU from 2013-14 levels
for U.S. West Coast cargo and $400 per FEU for all other cargo.
A key consideration at this time is the revenue baseline set as
contract negotiations move forward.
“Simply rolling over last year’s contract rates - let alone
reducing the rates, as some shippers have requested - is just
not workable,” Conrad said, reiterating that no major
transpacific carrier operated profitably in the trade in 2012 or
2013. “The goal is a meaningful net increase, with full cost
recovery for fuel, chassis, free time and other costs,
irrespective of supply/demand or other considerations.”
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. TSA members include:
Kawasaki Kisen Kaisha, Ltd. (K Line)
China Shipping Container Lines
Mediterranean Shipping Co.
COSCO Container Lines, Ltd.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Ltd.
Hanjin Shipping Co., Ltd.
Yangming Marine Transport Corp.
Zim Integrated Shipping Services
Hyundai Merchant Marine Co., Ltd.
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