Shipping lines that carry U.S. exports to Asia intend to increase their freight rates by at least $100 per 40-foot container effective Oct. 1.
The Transpacific Stabilization Agreement Westbound, a discussion group of 15 carriers, announced Tuesday that the guideline for the general rate increase applies to all commodities from all U.S. origin points.
Brian Conrad, executive administrator of the TSA Westbound, said carriers recognize an urgent need to begin a trend of rate improvements now that U.S. exports to Asia are beginning to increase.
“Rates have drifted down even more than usual during the typical summer slack period, to unsustainable levels. Not only are we headed into the busiest time of the year for trade, but we are also seeing signs in the market that U.S. exports to Asia are poised for recovery in the coming months,” Conrad said.
Exports, which tend to be lower-value commodities, are more price-sensitive than the consumer goods that the U.S. imports from Asia, and carriers are mindful of the price sensitivity of exports, Conrad said.
Nevertheless, westbound rates in recent months have dropped so low that an increase is needed if exports are going to make a meaningful contribution to carriers’ round-trip revenue, he added.
Some lines have already filed for rate increases to take effect in September, and those increases are likely to go forward. Other TSA Westbound members are looking to Oct. 1 for the effective day of their general rate increase, Conrad said.
The export season, which is tied somewhat to agricultural harvests, usually remains busy into the winter months, so TSA Westbound lines will be looking at further opportunities for revenue recovery in late 2013 and early 2014, he said.
Discussion agreement guidelines for GRIs are voluntary, and rate actions that carriers take may vary from the TSA Westbound guidelines in the confidential contract negotiations that take place between carriers and their customers.