TRANS-PACIFIC CARRIERS TO SEEK BOX RATE HIKE ON ASIAN IMPORTS

TRANS-PACIFIC CARRIERS TO SEEK BOX RATE HIKE ON ASIAN IMPORTS

Pacific ocean carriers meeting here have decided to push for a $225 a 40-foot container rate increase on Asian import shipments next year.

The carriers said they would try to install the rate increase next May, when the majority of contracts covering movements over the Pacific are renewed.The carriers, working together under the Transpacific Stabilization Agreement (TSA), said the rate increase was part of their ongoing effort to restore rates to levels common a few years ago.

Importers indicated they would argue against the increase in contract negotiations next year. They pointed out that the retail business, the mainstay of import traffic over the Pacific, has not been enjoying high returns over the last year.

"The toy industry in general has had some very average years, so we are trying hard to lower landed cost - not increase it," said David Akers, managing director of the Toy Shippers Association in Cincinnati. "We are hoping the carriers can help us do that."

The proposed increase comes just as Pacific carriers have raised their terminal handling charges for cargoes coming out of most Asian ports. Carriers say these surcharges are aimed at passing some of the increased costs of foreign terminal operations directly to shippers.

"It's a double dip - they come with a GRI (general rate increase) just as the THC (terminal handling charge) is going up," said Monica McFarland, manager of purchasing for Asics Tiger Inc. in Fountain Valley, Calif.

The TSA carrier group is comprised of four independent carriers and the Asia North America Eastbound Rate Agreement (Anera). Anera, a formal rate- setting conference, is made up of nine members.

Under the TSA mechanism, the carriers not only set pricing strategy, they also hold off a certain level of vessel space in the hopes of stabilizing competition. For the December through February period, generally a slack season for Asian imports, the carriers agreed to hold 14 percent of their vessel space off the market. Shippers have criticized such moves as an effort to artificially boost rates by restricting supply.

Independent ship lines in the TSA group are: Evergreen Marine Corp.; Yangming Marine Transport Co.; Hyundai Merchant Marine Ltd.; and Hanjin Shipping Co.

Members of the conference are: American President Lines Ltd.; Kawasaki Kisen Kaisha; Mitsui O.S.K. Lines Ltd.; Maersk Line; Orient Overseas Container Lines; Nippon Yusen Kaisha; Neptune Orient Lines; Hapag-Lloyd BV; and Sea-Land Service Inc.

The rate hike will not include Japanese shipments. The carriers said they would decide their pricing policy for that trade at a later date.

The Asian trade to North America is one of the largest trades in the world. More than 3 million containers are expected to be imported from Asia next year.