A combination of market indicators and forward bookings are pointing toward the early stages of an upswing in cargo volume on trans-Pacific trade routes, justifying the latest round of rate increases that took effect on April 1, according to the members of the Transpacific Stabilization Agreement.
The carriers say that increasing demand for cargo and reversing rate erosion will be critical points when negotiating with freight shippers for their 12-month contracts, which are due for renewal on or around May 1. The April 1 increases were intended to bolster rate levels and to pave the way for more increases in the contracts. More than 80 percent of those proposed increases were achieved.
The upturn in the market is expected to continue in 2013, said Brian M. Conrad, TSA executive administrator, in a written statement.
“As we head into the bulk of negotiations in April, it is critical for shippers to understand that rates which reflect little or no increase in rates over 2012 levels are simply not sustainable in the long run,” he noted.
The Transpacific Stabilization Agreement’s expansion to include the Westbound Transpacific Stabilization Agreement is set to take effect on April 14.