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TSA Lines recommend rate increase

After months of uneven demand and gradually eroding freight rates in the U.S.-Asia trade lane, container shipping lines say it is time to begin reversing the trend.

Member carriers in the Transpacific Stabilization Agreement (TSA) Westbound section have plans to raise freight rates, for all commodities and from all U.S. origin points, by at least $100 per 40’ container (FEU). A number of TSA-Westbound lines have already filed individual increases across the board or in key market segments.

TSA Westbound executive administrator Brian M. Conrad said there is an urgent need to begin rate restoration efforts in anticipation of fourth quarter cargo growth. “Rates have drifted down even more than usual during the typical summer slack period, to unsustainable levels,” Conrad explained.

Conrad stressed that lines view the $100 per FEU general rate increase (GRI) amount as a minimum, given current rate levels. While the GRI is voluntary and will be implemented by lines individually according to their specific needs at this time, Conrad said transpacific carriers remain under considerable financial pressure in the current environment and will be looking at further opportunities for revenue recovery in late 2013 and early 2014.