TSA MOVES UP SCHEDULED MAY 1 RATE INCREASE TO APRIL 15

(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 
TSA MOVES UP SCHEDULED MAY 1 RATE INCREASE TO APRIL 15 
Final $300 GRI is intended to offset rate erosion in preparation
for 2014-15 contract renewals. 
Oakland, CA /March 19, 2014 - Member container shipping lines in
the Transpacific Stabilization Agreement (TSA) have agreed to
bring forward a previously announced May 1, 2014 general rate
increase (GRI) to April 15, in an effort to mitigate rate
erosion seen in February and early March. The increase, set at
US$300 per 40-foot container (FEU) for all commodities and
origin/destination pairs, follows similar recommended increases
implemented on January 15 and March 15. 
TSA executive administrator Brian Conrad said the series of
increases represent a necessary step in correcting a slide in
rates that misrepresents actual conditions in the Asia-U.S.
freight market. “The downward rate pressures we are seeing do
not reflect the steadily improving cargo picture eastbound from
Asia,” Conrad said. “The Lunar New Year period was strong, with
average vessel utilization numbers in the 95% range; while most
people tend to focus only on the supply/demand imbalance, what
is getting lost in the pricing discussion is service value.” 
Conrad compared the rate situation in the transpacific to
decisions by governments worldwide to defer needed
infrastructure investment. “We are in effect negotiating the
annual operating budget for a major piece of global
transportation infrastructure that happens to be privately
financed,” he argued. “Competitive pressures to match the lowest
short-term rate levels and lock them into 12-month service
contracts across the board amounts to a significant deferred
investment in the trade. Eventually we will have to stop pricing
based solely on supply-demand and pay more attention to long-term service reliability and flexibility - hopefully before a
crisis makes the problems more acute and the solutions far more
costly.” 
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: 
APL Ltd.                      Kawasaki Kisen Kaisha, Ltd. (K Line)
China Shipping
 Container Lines             Maersk Line
CMA-CGM                      Mediterranean Shipping Co.
COSCO Container
 Lines, Ltd.                  Nippon Yusen Kaisha (N.Y.K. Line)
Evergreen Line                 Orient Overseas Container Line, Ltd.
Hanjin Shipping Co., Ltd. Yangming Marine Transport Corp.
Hapag-Lloyd AG                 Zim Integrated Shipping Services
Hyundai Merchant Marine Co., Ltd. 
Contact:
Niels Erich
T: 415.525.4520
Email: n.erich@comcast.net 
(bjh) NY 
#<873920.660640.3.12.0.0.76>#
 
 
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