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Box lines plan further Transpac rate increase

Box lines plan further Transpac rate increase
The member lines of the Transpacific Stablization Agreement (TSA) have announced a 1 July box rate hike as they say levels remain “well below target” following annual contract negotiations.

The TSA announced a general rate increase (GRI) from 1 July of $400 per feu to US West Coast ports and $600 per feu to all other destinations, subject to contract terms.

The 15 member lines are still seeking rate levels that ensure profitability following the conclusion of the majority of annual contracts with shippers on the Asia – North America trade.

 TSA executive administrator Brian Conrad said carriers had secured “modest” revenue gains in their 2013 – 2014 annual contracts with shippers and rates remain well below target levels needed to maintain profitability and invest for future growth”.

“The revenue issue is not going away,” said he. “We have to make the case repeatedly that short-term, off-season rates cannot be extended for 12 months or longer in contracts, and that new capacity entering the Asia - US market reflects global trends and an investment in productivity to meet future long-term demand. It does not somehow diminish service value and it does not justify moving cargo at unsustainable levels.”

The TSA added that part of recent increases had been offset by higher costs in terms of ports charges, labour and inland transportation costs both in the US and Asia.

In its weekly report analyst Alphaliner said the transpacific trade would remain under pressure this year with capacity on the Asia – US West Coast trade growing by 9.8%.