A new revenue index published by the Transpacific Stabilization Agreement shows revenue for maritime carriers in eastbound lanes from Asia steadily declining in the first six months of the year.
But the index, which seeks to be put new substance on the impact of supply and demand volatility in the market, also shows revenue for the 15 TSA carriers was mostly equal to or higher than revenue in the first six months of 2010 on a year over year basis.
The TSA Revenue Index tracks average revenue per-40 foot container from Asia to the U.S. West Coast and to the East and Gulf coasts. The numbers are benchmarked in percentage terms against the baseline month of June 2008. TSA skipped the recession year of 2009 as an anomaly.
The carrier discussion group is launching the index as operators are moving to shore up sagging rates that have helped pull down profits at several carriers, and pushed some into the red this year.
The first release of the index showed measure at 84.28 in June, the lowest point since June 2010, and about 10 percent below the high point for 2011 of 93.87 the index set in February.
Unlike the Drewry and Shanghai indices, which are published weekly in The Journal of Commerce built on freight rates, the TSA index sets June 2008 as the baseline month at 100, and its numbers are listed in percentage terms against that month.
Also, the TSA index is broader in scope than Drewry and Shanghai in that it covers shipper contract rates as well as NVOCC and 3PL spot shipments. TSA includes in its formula non-floating accessorial charges such as terminal handling and documentation fees. Bunker fuel surcharges float and are therefore not included in the formula.
The 2011 index trough June shows carries started off the year with relatively strong revenue compared to the first few months of 2010, with the measure up 13 percent year-over-year in February. However, the 2011 revenue index gradually declined each month. By contrast, carrier revenues in 2010 started from a lower number but grew each month. The 2010 numbers were especially strong in July through October, in the range of 102 to 114, which means they were higher than in the June 2008 baseline month.
The index to the East and Gulf coasts dipped even lower, to 79.21 in June from a 2011 high of 85.13 in February.
According to the Drewry Container Rate Benchmark, which tracks actual freight rates, carrier performance declined this summer until mid-August. Carriers in mid-August began implementing a peak season surcharge, and the Drewry index surged 21.5 percent in the week of Aug. 15 over the previous week.
TSA purposely avoided quoting actual freight rates. “Because the index covers a wide scope (all of Asia, all cargo, contract and spot rates, etc.) and because the various lines have very different mixes of cargo and trade scope, any specific dollar number would be less meaningful,” TSA stated.
TSA’s data is based on revenue figures provided by its member lines and covers more than 85 percent of the U.S. containerized import trade from Asia. The numbers are weighted based upon carrier revenue per-container and carrier market share.