Executive Briefings

Trans-Pacific Westbound Lines Set Rate Increase

Recent action by trans-Pacific ocean carriers to raise rates in the eastbound direction, from Asia to the U.S., is now being matched by services moving westbound. Member lines of the Westbound Transpacific Stabilization Agreement (WTSA) have announced a general rate increase to take effect Sept. 1. On the date, the carriers hope to boost dry-cargo rates by $150 per 40-foot container (FEU) and $120 per 20-foot container (TEU) from the West Coast, and by $200 per FEU and $160 per TEU for intermodal or all-water shipments from the U.S. East and Gulf Coasts. Refrigerated cargoes, a relatively high-value portion of the westbound trade, will rise by $250 per FEU and $200 per TEU from the West Coast, and by $300 per FEU and $240 per TEU for intermodal and all-water from the East and Gulf Coasts.

The carriers' rationale for the action was the same as that which accompanied a similar announcement last month by the Transpacific Stabilization Agreement, covering services in the eastbound direction (for more on that announcement, see ThinkTank, July 30, 2009). The lines stated their intent "to halt the steady erosion of rates in the U.S.-Asia freight market in recent months." WTSA executive administrator Brian M. Conrad said rates have sunk "to a point where serious action is needed to address basic service requirements."

WTSA is a discussion group whose members are not bound to follow its recommendations on rate and service changes. But the severity of the rate decline, triggered by global recession, has trans-Pacific carriers vowing to show unity in their determination to recover at least some of the losses suffered in recent months.

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Recent action by trans-Pacific ocean carriers to raise rates in the eastbound direction, from Asia to the U.S., is now being matched by services moving westbound. Member lines of the Westbound Transpacific Stabilization Agreement (WTSA) have announced a general rate increase to take effect Sept. 1. On the date, the carriers hope to boost dry-cargo rates by $150 per 40-foot container (FEU) and $120 per 20-foot container (TEU) from the West Coast, and by $200 per FEU and $160 per TEU for intermodal or all-water shipments from the U.S. East and Gulf Coasts. Refrigerated cargoes, a relatively high-value portion of the westbound trade, will rise by $250 per FEU and $200 per TEU from the West Coast, and by $300 per FEU and $240 per TEU for intermodal and all-water from the East and Gulf Coasts.

The carriers' rationale for the action was the same as that which accompanied a similar announcement last month by the Transpacific Stabilization Agreement, covering services in the eastbound direction (for more on that announcement, see ThinkTank, July 30, 2009). The lines stated their intent "to halt the steady erosion of rates in the U.S.-Asia freight market in recent months." WTSA executive administrator Brian M. Conrad said rates have sunk "to a point where serious action is needed to address basic service requirements."

WTSA is a discussion group whose members are not bound to follow its recommendations on rate and service changes. But the severity of the rate decline, triggered by global recession, has trans-Pacific carriers vowing to show unity in their determination to recover at least some of the losses suffered in recent months.

Read Full Article