TSA lines to raise rates US$400 per TEU on east-west Pacific

Transpacific Stabilization Agreement (TSA) shipping lines plan to raise rates by US$400 per TEU to the US west coast, and by $600 per TEU for inland destinations as well as impose a $400 peak season bunker surcharge from June to October next year, said a TSA communique.

"Freight rates continue to lag operating costs," said the organisation headed by Ron Widdows, also president of Singapore's American President Line. "Limited cost recovery in 2007-08 adds to current rate pressures and record fuel prices make floating bunker charges a top priority."

"Fuel prices are far too volatile, and ocean carriers are far too exposed to lock in a single price for a year," said Mr Widdows in a Reuters report.

"We're at a point where service levels are at minimum and, for some carriers, financial viability is threatened if we are not to share costs more equitably," he said.

The TSA statement also said other operating costs such as inland rail, truck and port charges are expected to rise as high as 8 per cent.

The TSA, which plans take steps similar to those taken by the Westbound Transpacific Stabilization Agreement (WSTA), represents 14 shipping lines serving the Asia-US route: NOL's American President Lines, CMA CGM, Cosco Container, Evergreen Marine, Hanjin, Hapag Lloyd, Hyundai Merchant Marine, "K" Line, MOL, NYK, OOCL, Yangming, MSC and Zim.