TWRA modifies fuel, currency adjustment rate
THE Transpacific Westbound Rate Agreement (TWRA), has modified its currency adjustment factor (CAF) and fuel adjustment factor (FAF) surcharges from July 1.
The CAF has been set at 52 per cent for cargo moving to Japan; three per cent for South Korea; 11 per cent for Taiwan; and 12 per cent for Singapore.
The slight increases for Japan and Singapore reflect an overall appreciation of the yen and the Singapore dollar against the US dollar during the past three months.
The CAF to Korea and Taiwan remains at current levels.
CAFs are intended to help offset rising currency costs incurred by carriers in markets where those currencies are rising against the US dollar - the currency in which ocean freight rates are universally expressed.
The TWRA CAF is adjusted by formula and rises and falls with current exchange rates.
The TWRA FAF has risen to US$40 per 40-foot and 45-foot container; $32 per 20-foot container; $20 per vehicle rated on a per unit basis; and $2 per revenue ton for all other cargo.
The increase reflects a higher overall cost paid by carriers during the past three months for marine fuel at key loading points in the westbound transpacific trade.
The FAF is also set according to a published formula, and is intended to help recover costs related to rising fuel prices outside carriers' control.
TWRA is a rate-making group of nine ocean and intermodal shipping lines serving the trade from ports and inland points in the US to destinations throughout Asia and the Indian sub-continent.