TSA to increase tariffs on US-bound cargo from Asia
Transpacific Stabilisation Agreement (TSA) members have agreed to increase tariff and service contract rates on shipments from Asia and the Indian sub-continent to the United States West Coast ports by a minimum of US$900 per feu (40 ft equivalent units) from May 1 next year.
The TSA, a discussion and policy-setting group of 13 ocean and intermodal carriers, also will impose a minimum of $1,000 per feu to other coastal and inland destinations.
In addition, a minimum $300-per-feu, peak-season surcharge will be applied to all service contract and tariff cargo, including shipments from Japan and the Indian sub-continent, between June 1 and November 30 next year.
'Certainly the announced increases and charges should come as no surprise to the trade, given current conditions,' said TSA executive director Albert Pierce.
The proposed increases reversed the serious erosion of rates seen in recent years, he said.
Carrier internal analyses estimated weekly operating losses in trade to amount to tens of millions of dollars at present rate levels, factoring in vessel and equipment capital costs.
'That revenue could be put to work for the entire trade, today and down the road, through re-investment to expand services and cover contingencies,' he said.
The Asia-US trade had grown nearly 20 per cent in 1998 and carriers did not see any indication of significant change in eastbound supply and demand next year.
Exports remained a safety valve for Asian economies, and the US remained the most robust, open market for those exports, Mr Pierce said.
Last week, the chief executives of 13 leading trans-Pacific container shipping lines met in Tokyo and agreed to further shore up freight rates in the eastbound trade lane from Asia to the US.
The TSA said economics of the trade - space shortages from Asia to the US, negative cargo growth from the US to Asia, resulting difficulties in repositioning equipment and depressed rates in both directions - would continue to drive carrier pricing decisions for the coming year.
