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UPDATE 1-Transpacific shipping lines want new $400 rate rise
March 14, 2012 / 5:28 PM / 6 years ago

UPDATE 1-Transpacific shipping lines want new $400 rate rise

* TSA recommends new rate rise from April 15

* Move comes ahead of an announced May 1 hike

* TSA says major Pacific carriers are suffering losses

COPENHAGEN, March 14 (Reuters) - A transpacific container shipping group has recommended a new rise in freight rates of $400 per 40-foot unit (FEU) to take effect on April 15 in a bid to bring up rates from loss-making levels.

Global freight rates have plunged in the economic crisis due largely to a glut in shipping capacity and higher fuel costs, and many container shipping companies are losing money.

The latest recommendation will take effect before another, previous recommendation for an increase from May 1 of $500 per FEU for U.S. West Coast cargo and $700 per FEU for all other shipments, the Transpacific Stabilization Agreement (TSA) said in a statement on Wednesday.

“The recommendation reaffirms the resolve of transpacific container lines to improve Asia-U.S. market rates as they move forward in a new round of contract talks with customers,” the Oalkland, California-based TSA said.

TSA member lines remain committed to recovering record high fuel costs through separate surcharges for bunker fuel and for diesel used in truck and rail transport, and they intend also to introduce a peak-season surcharge later in the year, the organisation said.

“Carriers operating in the Pacific are at a critical juncture,” TSA Executive Administrator Brian Conrad said in the statement. “Once again, as in 2009, we are back to a situation in which nearly all major carriers in the trade are moving cargo at a loss.”

Established in 1989, the TSA calls itself a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the United States.

The TSA’s members include Denmark’s Maersk Line , privately owned Switzerland-based Mediterranean Shipping Company (MSC), French privately held CMA CGM, China’s COSCO, Korea’s Hanjin Shipping, Taiwan’s Evergreen Marine and several others.

“Everything we do is voluntary and non-binding,” TSA spokesman Niels Erich said.

In years past, liner shipping was organised in groups called “liner conferences”, which met to discuss market conditions, freight rates and other common concerns.

The conference system was abolished in the United States in 1999 when the Ocean Shipping Reform Act took effect. The European Union banned the practice as against competition rules, effective from 2008.

“What we have now is a looser arrangement with much less enforcement authority over pricing,” Erich said. “Ultimately it is up to the lines to negotiate (prices).”

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