Trying again to stop the erosion of rates that has hit major east-west trade lanes this year, shipping lines in the eastbound Pacific intend to implement interim rate hikes on Jan. 1, 2012.
The Transpacific Stabilization Agreement, a discussion group of 15 carriers operating Asia to the U.S., said its member lines plan to individually raise all-inclusive freight rates and charges by a minimum of $400 per 40-foot container.
Although the rate increases will be too late for holiday-season imports, most of which have already entered the country, the carriers appear poised to take advantage of a cargo spike anticipated in January before factories in Asia close for the 2012 Chinese New Year celebrations.
“Carriers are seeing stronger U.S. holiday season cargo volumes on the heels of positive economic GDP and retail sales data, as well as robust forward bookings leading into the early Lunar New Year factory holidays in Asia,” said Brian Conrad, TSA’s executive administrator.
The recommended freight rate increase applies to all shipments moving under individual carrier tariffs, as well as service contract cargo in all commodity segments where volume commitments have been met or contract provisions permit.
“The objective is to meet expected cargo demand growth and begin reversing 2011 revenue losses resulting from slower than expected demand, on-going market uncertainty and the impact of short-term concessionary rates bleeding into 12-month 2011 service contracts,” the TSA said in a statement.
Conrad said the interim rate increases are separate from TSA’s customary annual recommended revenue recovery program that will be announced late this year or early next year in connection with the 2012-13 service contracts, most of which will take effect on May 1, 2012.