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February 2007

United States - Asia container lines agree to raise scrap metal freight rates

Transpacific shipping lines in the Westbound Transpacific Stabilization Agreement (WTSA) are recommending increases to metal scrap freight rates for 2007. Effective February 15, 2007, WTSA member lines say they will raise metal scrap rates by US$100 per 40-foot container (FEU) and $80 per 20-foot container (TEU) on port-to-port cargo and West Coast/East Coast local door moves to Asia, and by $150 per FEU and $120 per TEU for inland point or minilandbridge intermodal cargo.

Despite continued strong industrial demand for recycled scrap in Asia, rates remain low to the point that some carriers in the trade have stopped soliciting scrap shipments to certain destinations, most notably in China, because current rates do not adequately cover transport, equipment and cargo handling costs. This is particularly true for intermodal United States cargo, with westbound carriers anticipating rail rate increases of as much as 20% in 2007.

WTSA is a voluntary discussion and research forum of 10 major container shipping lines serving the trade from ports and inland points in the United States to destinations throughout Asia. Information on all recent and scheduled guideline actions adopted by WTSA can be found on the Agreement’s website, www.wtsacarriers.org.


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