Carriers in the eastbound trans-Pacific trade plan to increase freight rates significantly on imports from Asia in 2013.
The Transpacific Stabilization Agreement, a discussion group representing 15 carriers in the trade from Asia to the U.S., on Tuesday projected increases of $800 per 40-foot container on shipments to the West Coast and $1,000 per 40-footer on all-water services to the East and Gulf coasts. It also announced a voluntary guideline for an increase of $1,200 per FEU for intermodal shipments via all coasts.
The announcement is significant because the carriers indicated they intend to apply the proposed increases to all service contracts signed in the coming months, including those that begin in October. Some beneficial cargo owners are expected to sign “early bird” contracts beginning in mid-October.
Most contracts for the 2013-14 season will be signed next spring and will take effect on May 1. By capturing the early bird signers this year, carriers hope to prevent rate erosion during the winter months when cargo volumes normally drop, and freight rates drop in tandem with imports from Asia.
“It is critical that, between individual lines’ announced September rate initiatives and the TSA guideline adjustments, there will be a reasonably compensatory baseline in place for the coming contract year, beginning with early contracts coming up for renewal, TSA Executive Administrator Brian Conrad said.
The TSA also emphasized carriers’ intent in the upcoming contract negotiations to recover increases in fuel costs. Bunker fuel costs are increasing because of the new Emissions Control Area that was established in August for North America under the auspices of the International Maritime Organization.
Commercial vessels now must burn more costly low-sulfur fuel within 200 miles of the North American coastline. Regular bunker fuel also has been costly this year, with current prices close to $700 per metric ton, Conrad noted.
Fuel costs also have increased on the inland portion of intermodal services. The TSA proposed establishment on Jan. 1 of a single component for all inland destinations that will be incorporated into the bunker charge and will replace the current inland fuel surcharge.