Transpacific Stabilization Agreement to raise rates in 2011

“It is unfortunate that this is being done before there can be any change to the Shipping Act,” said Michael Berzon, out-going chairman of the National Industrial League’s (NITL) ocean cargo committee.

By ·

Ocean carriers comprising the Transpacific Stabilization Agreement (TSA) have announced that rates will be hiked by a significant margin next year.

According to cartel spokesmen, “suggested” rate increases of $400 per 40-foot container (FEU) for cargo moving to U.S. West Coast ports and $600 per FEU for all other cargo are likely to be imposed by May 1, 2011.

“It is unfortunate that this is being done before there can be any change to the Shipping Act,” said Michael Berzon, out-going chairman of the National Industrial League’s (NITL) ocean cargo committee.
“Carriers can raise rates in lockstep now, without any concern that such behavior represents a violation of anti-trust laws.”

TSA lines have further recommended full recovery of costs for other equipment sizes, and improved collection of floating bunker and inland fuel charges as well as Panama Canal, Alameda Corridor and other fixed accessorial charges.

This comes at a time when the cartel admits that it has had “healthy revenues” over the past two quarters. Still, they say, an early end to the transpacific peak season has left that trade lane lagging relative to other Asia container markets, while operating costs continue to rise.

Carriers called for adjustments to store-door delivery rates as warranted, to levels that adequately compensate carriers for rising costs in providing those services. Finally, TSA is recommending a peak season surcharge of $400 per FEU, effective from June 15, 2011 through November 30, 2011, with those dates subject to adjustment based on changing market conditions.

As reported in LM, the NITL maintains that the current U.S. shipping regulatory system today does not work in the best interests of U.S. businesses that are required to compete in the global market. The League said H.R. 6167 was an “appropriate” first step toward achieving a more robust, competitive and efficient maritime industry. It also added that the bill, “seeks to address recent problems faced by importers and exporters in enforcing service contract obligations in a timely and cost effective manner.”

Berzon said in a subsequent interview that with a “lame duck” Congress, there is scant chance that such legislation will be enacted this year.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Sorting Out Your Sortation Options
Guiding you through the process of evaluating and selecting the right “mission-critical” sortation solution
Download Today!
From the April 2017 Issue
How does a fastgrowing, e-commerce startup company build out order fulfillment capabilities? Thrive Market answered that question with its new facility in Indiana.
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
Putaway 101: Everything in its Place
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2016 Warehouse/DC Operations Webcast: Confronting omni-channel complexity
During this webcast we’ll examine the current activities, trends, and best practices in warehouse and DC operations management and how companies plan to address complex issues associate with omni-channel fulfillment.
Register Today!
EDITORS' PICKS
ProMat closes: Make your plans for Modex 2018
With a record number of exhibitors and attendees seen at ProMat 2017, MHI anticipates more of the...
Keynote: Magic is the result of over-preparation and over-delivering to customers
During his keynote presentation Wednesday afternoon, Earvin “Magic” Johnson told a packed...

Keynote panel confirms digital supply chain shift seen in new MHI study
Wednesday’s keynote panelists agreed it is time to embrace the shift to digital supply chains seen...
MHI to honor original products, solutions with 5th-annual Innovation Awards
On Wednesday, during MHI Industry Night with Dana Carvey, the winners of the 5th-annual MHI...