Transpacific Stabilization Agreement

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TSA Lines Recommend Additional
April 15 Rate Adjustment

Increase is aimed at further increasing rates that have fallen since May 2011, as 2012-13 contracts are negotiated.


Oakland, CA / March 14, 2012 – Following on a previously announced March 15 $300 general rate increase (GRI) which they expect to be widely applied, 15 member carriers in the Transpacific Stabilization Agreement (TSA) are recommending a further increase of US$400 per 40-foot container (FEU) effective April 15, 2012, to address rates that remain below baseline levels at that time.

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 increase comes just ahead of the previously announced May 1 recommended increase of $500 per FEU for US West Coast cargo and $700 per FEU for all other shipments.

TSA lines also stressed that they remain committed to recovering record high fuel costs through separate bunker and inland fuel surcharges. They also say they intend to implement a peak season surcharge (PSS) later in the year, with the amount and duration to be determined soon, based on a review of anticipated market conditions moving into the summer and fall months.

“Carriers operating in the Pacific are at a critical juncture,” explained TSA executive administrator Brian M. Conrad. “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. For any carrier rate or cost recovery effort to be meaningful in 2012-13, it must reflect an actual increase from rates in effect at the beginning of the previous year; and it cannot extend promotional short-term rates in select trade segments to all commodities and all routes for 12 months.”

Conrad pointed to the service consolidation already seen in the trade, including elimination of service strings, and deteriorating schedule reliability. “Supply and demand is no longer the only or even the primary consideration in carrier pricing,” he said. “The conversation needs to focus on sustained carrier viability and service quality in a major, recovering trade lane with complex and sophisticated service needs.”

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:
APL Ltd.
China Shipping Container Lines
CMA-CGM
COSCO Container Lines, Ltd.
Evergreen Line
Hanjin Shipping Co., Ltd.
Hapag-Lloyd AG
Hyundai Merchant Marine Co., Ltd.
Kawasaki Kisen Kaisha, Ltd. (K Line)
Maersk Line
Mediterranean Shipping Co.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Ltd.
Yangming Marine Transport Corp.
Zim Integrated Shipping Services


Contact:
Niels Erich
T: (415) 525-4520
E: n.erich@comcast.net


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