TRANSPACIFIC SHORT-TERM RATES

How much of this will end up in large BCO's contracts?  Or even large forwarders/OTIs?  Will BCOs get something the OTIs do not?  Stay tuned.

TSA announces recommendations for minimum short term rates

Short-term minimums are designed as a supplement to service contract rates recommended by members of the Transpacific Stabilization Agreement last October.

By Chris Dupin |Thursday, April 02, 2015

   The 15 container carriers that make up the Transpacific Stabilization Agreement are recommending their members institute minimum short-term market rates, to take effect May 1, 2015.
   The short-term minimums are intended to complement minimum service contract rates, also effective May 1, that were announced last October. Many service contracts between shippers and container carriers in the transpacific trade operate on a year that runs from May 1 through April 30.
   The new Asia-U.S. market rate minimums are proposed in the following amounts:

• $2,050 per FEU for U.S. West Coast container yard (CY) shipments via California ports;
• $2,100 per FEU for U.S. West Coast CY shipments via Pacific Northwest ports;
• $4,100 per FEU for U.S. East and Gulf Coast CY cargo;
• $4,400 per FEU for intermodal moves to key Midwestern U.S. interior points.

   “While most cargo in the trade continues to move under contract, more customers use the short-term market as a hedge for certain commodities and types of shipments,” said TSA executive administrator Brian Conrad in a statement. “Given current cost pressures, it is essential that carriers address both market segments simultaneously for the coming year.”
   Conrad said carriers remain committed to a $600 general rate increase (GRI) scheduled April 9 and the service contract rates announced in October. TSA added further GRIs are likely for the summer peak period, beginning in June, with details to follow.
   The TSA members are: APL, China Shipping, CMA CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, “K” Line, Maersk, MSC, NYK, OOCL, Yang Ming and ZIM.