CANADA/ASIA CARRIERS PLAN RATE HIKES FOR 2003-2004 CONTRACTS
Member lines of the Canada Transpacific Stabilization Agreement said they plan to raise base freight rates across the board, effective May 1, for the Asia to Canada trade.
The 12 member carriers of the CTSA will raise rates by $600 per 20-foot container, $800 per 40-foot container, $900 per 40-foot high-cube box and $1,010 per 45-footer. Proportionate increases will be taken for cargo rated on a weight, measurement, per unit or other basis.
CTSA also indicated its peak-season surcharge of $400 per 40-foot container in effect this year would be reinstated on June 1, 2003.
'The increases are assumed to apply to base rates at current tariff levels, and as a result may ultimately be higher for service contract accounts, or in the event that existing rates show volatility in coming months prior to the May 1 effective date of the planned adjustments,' CTSA said.
The voluntary discussion agreement said sustained growth in the trade has outpaced freight rates, while chronic imbalances and structural changes in the trade have added dramatically to operating costs.
CTSA said a growing share of the transpacific trade is manufacturing and retail supply chain shipments from contract factories or joint venture plants in Asia. This business relies 'more heavily on end-to-end, time-definite transportation and logistics services, requiring real-time shipment visibility on the Internet and complex consolidation and distribution services.'
In September, the Transpacific Stabilization Agreement said they intend to raise base freight rates across the board and implement other provisions in their 2003-2004 tariffs and service contracts for the Asia-to-U.S. trade.
TSA carriers said they intend to raise base freight rates by $700 per forty-foot equivalent unit for all-water service to the U.S. West and East coasts, and by $900 for all intermodal inland point and cross-country mini-landbridge shipments. The increases will take effect upon expiration of current contracts or May 1, which ever is sooner. There will also be proportionate increases for other equipment sizes and cargo otherwise rated.
The transpacific freight market is now the world's largest trade lane, accounting for about 16 percent of global container trade, Drewry Shipping Consultants said. About 60 percent of the trade moving from Asia to the United States is from China, including Hong Kong.
Members of the CTSA are APL, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai Merchant Marine, 'K' Line, Maersk Sealand, Mitsui O.S.K. Lines, P&O Nedlloyd, N.Y.K. Line and OOCL.