Box lines in the US-Asia container trades are pushing for freight rate increases from export customers as a result of pent-up demand forecast in Q4 15.
The Transpacific Stabilization Agreement (TSA), which represents 15 liner operators, announced on 8 September that the lines would seek to phase-in the rate increases from the major US container terminals beginning on 1 October.
In addition to anticipated export demand, TSA said the move reflects the trade’s recovery from congestion challenges at West Coast ports earlier this year and an “urgent need” to end decreasing rates.
“Current westbound rate levels in many cases do not fully cover costs,” said TSA executive administrator Brian Conrad.
Westbound rates contribute only minimally to round-trip sailings between Asia and the United States, Conrad said, and barely compete for vessel space with empty boxes destined for refilling in Asia.
“Worse, at a time when westbound equipment is already in short supply, depressed rates encourage migration of containers to other trades,” Conrad added.
In the Asia-US eastbound routes, 40-ft container benchmark rates in mid-August for Shanghai to Los Angeles and Shanghai to New York were USD1,606 and USD2,906, respectively, according to Drewry Maritime Research.
Container lines in the westbound routes will be looking to establish new target rates for all dry commodity segments that will translate into “modest increases in most cases”, according to TSA. It said carriers intend to follow with similar increases in November and December.