NEWPORT, R.I. — The Transpacific Stabilization Agreement’s expansion to include the Westbound Transpacific Stabilzation Agreement is set to take effect April 14, the carrier discussion groups’ executive administrator said.
The Federal Maritime Commission had requested additional information on the change, which the carriers said would reduce their administrative costs without harming shippers.
Discussion agreements such as the TSA and WTSA have antitrust immunity to discuss rates and set voluntary guidelines, but are prohibited from jointly setting rates or discussing capacity.
Having separate eastbound and westbound discussion agreements is unwieldy and prevents carriers from discussing the trade’s round-trip economics, said Brian Conrad, the groups’ executive administrator.
Currently, when a carrier asks about the westbound market during a TSA meeting, “we’d have to say, ‘time out, time out — we can’t talk about westbound because that’s a separate agreement,’ ” Conrad said.
The combined discussion group plans to maintain eastbound and westbound groups of shipper representatives, Conrad told the annual Newport, R.I., trade and transportation conference of the Coalition of New England Companies for Trade.
Conrad noted that PIERS growth forecasts remain tepid — 2 percent or slightly higher from Asia to the U.S., and 3.9 percent for the smaller westbound trade, which would be improvements from last year’s 0.3 percent growth in imports and 0.1 percent decline in exports.
The trans-Pacific trade remains highly imbalanced. PIERS forecasts 12.8 million 20-foot-equivalent units eastbound and a record 6.9 million TEUs westbound this year. “This is still very much an import-driven trade,” Conrad said.
That imbalance, and a mismatch of import and export origins and destinations, creates equipment-repositioning problems that a two-way discussion agreement would be better equipped to address, he said.
With most forecasters expecting cargo growth to be in the low single-digits for years to come, controlling costs is paramount, he said. Carriers “are probably going to have to get used to a world where 3 to 4 percent increases in volume would be considered a decent year.”