Transpacific Stabilization Agreement

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TSA Lines Welcome Signs of Market Recovery
and April 1 GRIs, as Key to Contract Talks



Oakland, CA / April 3, 2012 – Transpacific container shipping lines say a combination of leading market indicators and forward bookings suggest the beginnings of a gradual upturn in cargo volumes, and that is helping to support the latest round of general rate increases (GRIs) that took effect on April 1.

Carriers say strengthening demand and a reversal of rate erosion seen since the end of 2012 are critical to ongoing negotiations with freight shippers toward signing the 12-month contracts under which more than 90% of containerized cargo from Asia to the U.S. moves. Most of those contracts come up for renewal on or around May 1. The April 1 increases are intended to restore current market rates closer to sustainable levels, to then pave the way for negotiation of further meaningful increases in the contracts themselves. Carriers will continue to assess the current market in the coming months, seeking further opportunities for improvement in moving market rates.

TSA executive administrator Brian M. Conrad said the current trend of modest but steady growth is expected to continue in 2013, with improved vessel utilizations already apparent throughout April, following the traditional post-Lunar New Year lull. “Coming off a period of close to zero cargo growth in 2012, the outlook is definitely more positive at this point,” he said.

Conrad stressed that despite repeated efforts to shore up rates during the 2012-13 contract season as contracts permitted, revenue gains were inconsistent, as reflected in dire financial reports and ongoing industry consolidation, service changes and formation of new alliances. “As we head into the bulk of the negotiations in April,” he explained, “it is critical for shippers to understand that rates which reflect little or no increase in rates over 2012 levels are simply not sustainable in the long run. The financial repercussions are serious, and carriers are looking to ensure that new contracts include rates that reflect a meaningful increase above 2012 levels, and closer to the  post-April 1 market trends”.

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.
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 KisenKaisha, 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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