Another set of historic rate increases are on tap for the trans-Pacific, as the 15 members of the Transpacific Stabilization Agreement announced hikes totaling $1,000 per FEU.
The rate hikes come in the form of a combined general rate increase and peak season surcharge. The $600 per 40-foot container and $400 per FEU peak season surcharge will attempt to add $1,000 per container to rates on Jan. 15, in anticipation of a cargo surge preceding the Chinese New Year. The new charges mirror an announcement from Maersk and MOL last week. Hapag-Lloyd also announced trans-Pacific eastbound rate hikes.
"It's critical, after another year of only very slight net gains at best, that carriers shore up rate levels and hold the line on rising costs as we head into a new contracting season and ramp up to meet Lunar New Year seasonal demand," TSA executive Brian Conrad said in a press release.
This is the second $1,000 per FEU rate hike announced in as many months, as TSA carriers attempted to raise trans-Pacific rates by $1,000 per FEU on Dec. 15. Drewry's benchmark spot rate from Hong Kong to Los Angeles rose 39.5 percent, or $682, this week in response.
Conrad said the GRI is part of an ongoing effort by TSA carriers to reverse erosion. The peak season surcharge, he said, reflects a tightening capacity as shippers attempt to move cargo in advance of the week-long Chinese holiday.
The TSA's last GRI, a $600 per-FEU boost on Nov. 15, brought rates up by $300. Those gains deteriorated in the weeks following, as spot rates dropped 18.8 percent in the four weeks from Nov. 19 to Dec. 10.
There has been no indication that the lines will also enact a $1,000 port congestion surcharge, which carriers promised the Federal Maritime Commission would be delayed into 2015. Congestion at Southern California ports is still an issue, and is causing operational costs for carriers to rise exponentially.
The TSA includes APL, China Shipping Container Lines, CMA CGM, Cosco Container Lines, Evergreen Line, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, Mediterranean Shipping CO., NYK Line, OOCL, Yang Ming and Zim Integrated Shipping Services.