The Trans-Pacific Stabilization Agreement (TSA), a discussion group of carriers in the Trans-Pacific Eastbound trade, today announced its guidelines for revenue recovery initiatives to its member carriers.
The carriers, suffering from consolidated losses in the billions of dollars in 2011, are advised to implement various initiatives to restore rates to sustainable levels for the 2012-2013 contract season.
The TSA recommends to implement a General Rate Increase of $ 300 / 40’ container (other sizes per formula) as of March 15, 2012 to establish a baseline for contract negotiations in April close to the 2011 contract levels.
For the 2012-2013 contract season the TSA recommends an increase of $ 500 / 40’ container (other sizes per formula) to the West Coast and $ 700 / 40’ container (other sizes per formula) to all other points (EC, Gulf Ports and IPI points).
The TSA argues that “the erosion in transpacific rates during 2011 has been well-documented and dramatic,”, further stating that “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. This year in particular, rate recovery must be meaningful in order to maintain service levels and, ultimately, carrier viability.”
In line with the expected increases, WorldBridge Logistics will file a GRI for all rates ex Asia and ISC in the amounts of $ 240/20’ - $ 300/40’ - $ 338/40HC – $ 380/45’ effective March 15, 2012.
We are sure that there will be discussions about the planned increases within the shipping community, and the market will eventually decide which turn rates will take.
We will carefully watch and evaluate the developments and will take direction from the market on the final rate adjustments.
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