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TSA predicts improving carrier market in 2007

TSA predicts improving carrier market in 2007

Hong Kong: Members of the Transpacific Stabilization Agreement (TSA) have indicated that they see a "much improved" 2007 outlook for carriers based on current market trends in Transpacific trade. These include continued double-digit world trade growth, driven by Asian exports, improved contracting within Asia Europe trade and an anticipated balance between supply and demand for the 2007-08 contract year due to recent capacity growth.

Tadamasa Ishida, NYK evp and a member of the new TSA Executive Committee (TSAEC) explained, "Most economic forecasts anticipate growth of 10 to 12% in global trade for 2007.   Since most of that trade moves on the ocean, double-digit growth is also expected in demand for container shipping, continuing the robust growth in the Transpacific trade."

Other trends leading to the positive market prediction are: awareness of increased landside delivery costs by both carriers and customers and market recognition of the need for improved profitability to ensure long term growth in container trade volumes.

Despite the optimistic outlook, TSA members identified areas of concern such as cost escalation due to factors such as rising U.S. railroad intermodal freight rates, the high cost of landside transportation, the increasing cost of terminal services and fuel costs that remain higher than bunker charges. According to J.S. Lee, Hanjin esvp and TSAEC member, these costs "all translate into a simple choice: improve rates or continue to see poor financial results".

TSA members include: Evergreen Marine Hanjin Shipping, APL, NYK Line, Cosco, MOL, OOCL, "K" Lines, Hyundai Merchant marine and Yang Ming Transport.  [17/01/07]

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