Transpacific peak-season surcharge will succeed, claims TSA
Shipping lines confident demand will grow as retailers stock-up for Christmas
Transpacific carriers believe they will finally be able to implement a peak-season surcharge (PSS) in the coming weeks as retailers start to stock up for Christmas.
The Transpacific Stabilisation Agreement (TSA), a rate-recommending organisation, has recommended that its shipping line members impose a PSS of $400/feu from 15 August.
The TSA initially announced that a PSS should apply from 15 June, but it was delayed several times because market conditions were not strong enough for carriers to push the price increases through.
But the TSA now believes retailers are beginning to restock for the back-to-school and festive holiday seasons and businesses are resuming global sourcing of materials and components.
Executive Administrator Brian Conrad said carriers had recently experienced a steady increase in traffic that suggested steady, stronger demand in the next three months.
“Based on more robust forward-bookings and other favourable market signals, the consensus now is that the eastbound trade lane has begun the customary seasonal ramp-up to a pronounced peak,” he said.
He added that as cargo demand rose, costs were “dramatically” increasing, too.
Owned and leased container equipment remains in short supply, with prices at a premium; inland rail and trucking charges had increased; and cargo handling, documentation and customer service costs were up, especially in local Asian currencies.
While the TSA is confident its members will be able to push up prices in the coming weeks, the latest figures from the Shanghai Containerised Freight Index (SCFI) show prices on the trade declining.
Last week, the SCFI showed that prices from Shanghai to the US west coast fell to $1,585 per feu, a decline of $24 on the previous week, while prices from Shanghai to the US east coast reached $3,093 per feu, down $7.
Container derivatives broker Clarkson Securities believed last week’s decline in rates reflected weak market conditions, especially on services to the US west coast.
“US west coast has been under a lot of pressure as the physical market looks in decline for now, and although US east coast is more resilient – widening the spread between the two further – there are cargo concerns there too,” it said.
TSA members include: APL, K Line, CSCL, Maersk Line, CMA CGM, MSC, Coscon, NYK, Evergreen, OOCL, Hanjin, YangMing, Hapag-Lloyd, Zim and HMM.
The Transpacific Stabilisation Agreement (TSA), a rate-recommending organisation, has recommended that its shipping line members impose a PSS of $400/feu from 15 August.
The TSA initially announced that a PSS should apply from 15 June, but it was delayed several times because market conditions were not strong enough for carriers to push the price increases through.
But the TSA now believes retailers are beginning to restock for the back-to-school and festive holiday seasons and businesses are resuming global sourcing of materials and components.
Executive Administrator Brian Conrad said carriers had recently experienced a steady increase in traffic that suggested steady, stronger demand in the next three months.
“Based on more robust forward-bookings and other favourable market signals, the consensus now is that the eastbound trade lane has begun the customary seasonal ramp-up to a pronounced peak,” he said.
He added that as cargo demand rose, costs were “dramatically” increasing, too.
Owned and leased container equipment remains in short supply, with prices at a premium; inland rail and trucking charges had increased; and cargo handling, documentation and customer service costs were up, especially in local Asian currencies.
While the TSA is confident its members will be able to push up prices in the coming weeks, the latest figures from the Shanghai Containerised Freight Index (SCFI) show prices on the trade declining.
Last week, the SCFI showed that prices from Shanghai to the US west coast fell to $1,585 per feu, a decline of $24 on the previous week, while prices from Shanghai to the US east coast reached $3,093 per feu, down $7.
Container derivatives broker Clarkson Securities believed last week’s decline in rates reflected weak market conditions, especially on services to the US west coast.
“US west coast has been under a lot of pressure as the physical market looks in decline for now, and although US east coast is more resilient – widening the spread between the two further – there are cargo concerns there too,” it said.
TSA members include: APL, K Line, CSCL, Maersk Line, CMA CGM, MSC, Coscon, NYK, Evergreen, OOCL, Hanjin, YangMing, Hapag-Lloyd, Zim and HMM.
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