Breaking News

Tweet TWEET

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>#