TSA LINES PLAN ACROSS-THE-BOARD RATE HIKES
Carriers of the Transpacific Stabilization Agreement said they plan to raise rates across the board August 19 in an effort to cut lines' losses in the eastbound transpacific trade.
The carriers said the increase is necessary to partially offset what they estimate will be a combined 2002 loss of $1.2 billion in the Asia-to-U.S. trade.
The increases will be $380 per 45-foot container, $340 per high-cube 40-footer, $300 per 40-footer, $225 per 20-footer, $19 per pallet, $12 per metric ton, $6 per cubic meter and $2 per bale.
The TSA said the planned increase 'is modest, given clearer indication as to the direction of the market, and the fact that virtually no major, full-service carrier is operating profitably at current rate levels.'
The scheduled increases 'are intended to help reduce those losses, and will not be sufficient to restore profitability, the TSA lines said.
The TSA 'noted that cargo demand has been steadily high since March, reflecting continued strong consumer spending in the U.S. Ships have been running at or near full utilization on both intermodal and all-water services, and the trend has extended into July, despite West Coast labor uncertainty,' the discussion agreement said.
Nonetheless, freight rates have remained significantly below 2001 levels, TSA said. Service contracts for 2002-2003, which were mostly negotiated in the spring, did not take into full account the current sustained demand in capacity.