Transpacific container shippers back March rate rise
Transpacific container shippers have recommended a general rate rise of $300 per 40-foot unit (FEU) to take effect on March 15 and further increases in May to restore rates from loss-making levels, their organisation said on Thursday, Reuters reports. The March increase would follow a $400 per FEU initial rate increase implemented on Jan. 1.
Global freight rates have plunged in the economic crisis due largely to a glut of capacity, and many container shippers are losing money, squeezed also by higher fuel costs.
Member carriers in the Transpacific Stabilization Agreement (TSA) reaffirmed a commitment to restore rate levels going into 2012-13 contract talks, the Oakland, California-based TSA said in a statement.
"The March general rate increase (GRI) is intended to bring Asia-U.S. freight rates back up to near 2011 contract levels, establishing a baseline for upcoming contract negotiations," the TSA said.
The TSA members, which include the world's biggest container shipping lines, adopted guidelines to raise rates by at least an additional $500 per FEU for cargo to the U.S. West Coast and at least $700 per FEU for all other destinations no later than May 1, the TSA said.
TSA lines would consider further steps for later in the year, after a review of market conditions and outlook for the second half of 2012, the TSA said.
The TSA's members include Denmark's Maersk Line, privately owned Switzerland-based Mediterranean Shipping Company (MSC), French privately held CMA CGM, China's COSCO, Korea's Hanjin Shipping, Taiwan's Evergreen Marine , and several others.
"The erosion in transpacific rates during 2011 has been well-documented and dramatic," TSA executive administrator Brian Conrad said in the statement. "If carriers adopt a marginal increase that only partially offsets huge losses as costs continue to rise, the result is another 18 months of losses."
Maersk Line, a unit of Danish shipping and oil group A.P. Moller-Maersk, said in its third-quarter report in November that it would suffer losses in 2011.
Bunker fuel prices have exceeded $700 per metric tonne since the beginning of the year, and West Coast prices are approaching record levels seen in mid-2008, the TSA said.
Established in 1989, the TSA calls itself a "research and discussion forum of major container shipping lines" serving the trade from Asia to the United States.
Liner shipping was earlier organised in similar groups called "liner conferences", which met to discuss market conditions, freight rates and other common concerns. But the European Union decided in 2006 to ban the practice as against competition rules and the ban took effect in 2008.
Global freight rates have plunged in the economic crisis due largely to a glut of capacity, and many container shippers are losing money, squeezed also by higher fuel costs.
Member carriers in the Transpacific Stabilization Agreement (TSA) reaffirmed a commitment to restore rate levels going into 2012-13 contract talks, the Oakland, California-based TSA said in a statement.
"The March general rate increase (GRI) is intended to bring Asia-U.S. freight rates back up to near 2011 contract levels, establishing a baseline for upcoming contract negotiations," the TSA said.
The TSA members, which include the world's biggest container shipping lines, adopted guidelines to raise rates by at least an additional $500 per FEU for cargo to the U.S. West Coast and at least $700 per FEU for all other destinations no later than May 1, the TSA said.
TSA lines would consider further steps for later in the year, after a review of market conditions and outlook for the second half of 2012, the TSA said.
The TSA's members include Denmark's Maersk Line, privately owned Switzerland-based Mediterranean Shipping Company (MSC), French privately held CMA CGM, China's COSCO, Korea's Hanjin Shipping, Taiwan's Evergreen Marine , and several others.
"The erosion in transpacific rates during 2011 has been well-documented and dramatic," TSA executive administrator Brian Conrad said in the statement. "If carriers adopt a marginal increase that only partially offsets huge losses as costs continue to rise, the result is another 18 months of losses."
Maersk Line, a unit of Danish shipping and oil group A.P. Moller-Maersk, said in its third-quarter report in November that it would suffer losses in 2011.
Bunker fuel prices have exceeded $700 per metric tonne since the beginning of the year, and West Coast prices are approaching record levels seen in mid-2008, the TSA said.
Established in 1989, the TSA calls itself a "research and discussion forum of major container shipping lines" serving the trade from Asia to the United States.
Liner shipping was earlier organised in similar groups called "liner conferences", which met to discuss market conditions, freight rates and other common concerns. But the European Union decided in 2006 to ban the practice as against competition rules and the ban took effect in 2008.