Transpacific container shipping lines today warned shippers they will be pushing for a floating monthly fuel charge at next year's contract discussions in May to spread the burden of record bunker prices.

"In a trade where many of the carriers were not operating profitably prior to the most recent run-up in fuel prices, the additional pressure coming from the rapid escalation in fuel cost in recent weeks is simply not sustainable, said Ron Widdows, chairman of the Transpacific Stabilisation Agreement (TSA).

"When we come back to the table in this year's contract discussions with customers we are going to have to revisit the fuel cost issue and, as difficult as it may be, tackle the issue of a full floating charge, adjusted monthly, to more appropriately share the burden of fuel cost escalations, just as all other transport modes have done in the US and globally."

Widdows said that between now and the May sit down, the 14 carriers represented by the TSA will be "exploring any and all options available to them, to control operating costs and mitigate the impacts of higher fuel prices".

In shippers' language, this translates into fuel surcharges. The TSA is finalising its 2008-09 revenue and cost recovery program and will announce it shortly.

Marine bunker fuel reached record prices in late October, varying by load port but in the range of US$450 per ton - up from around $400 per ton at the beginning of the month, $350 at the beginning of June, and under $300 at the beginning of 2007.

"Carriers are looking at a 50 percent increase in marine fuel costs alone during 2007," Widdows said. "The structure of the vast majority of contracts in the transpacific trade did not anticipate the degree of escalation in fuel costs that has occurred."

Operating costs may be up, but the transpacific container market is growing faster than expected.

Cargo volume for the first nine months of the year totaled 6.84 million TEU, up 8.2 percent from the 6.32 million boxes carried during the same period a year earlier.

The TSA figures reveal strong growth in shipments during September, with high vessel utilisation rates continuing through the first week of October.

In September, TSA lines carried more than 976,000 TEU, a near 12 percent gain over September 2006, bringing the third quarter total to 2.72 million boxes - up 9.1 percent from third quarter 2006.

All of the current TSA member lines reported near-full ships through the month of September and first week of October, most notably in the high-traffic Southern California segment, which saw 97 percent utilisation or better over those five weeks.

With West Coast services at or near capacity, and with concerns about possible West Coast labor disruption during upcoming longshore contract negotiations, all-water services to the East Coast through the Panama Canal have seen strong growth in recent months.

Third quarter all-water cargo volumes were up by an average 26.8 percent over 2006. Year-to-date East Coast all-water volumes are up an average 17.2 percent. Utilisation on TSA members' Panama Canal services have averaged 95 percent or higher since the beginning of August.

"While one would expect moderation in transpacific growth, the market is nonetheless growing, and at a healthier pace than some earlier reports indicated," Widdows said.

However, he offered a note of caution. "The tendency to look at a snapshot of one month, one gateway or one commodity segment and draw conclusions about the bigger picture can be misleading."