THE Transpacific Stabilization Agreement (TSA) forecasts strengthening market conditions in 2007 for ocean carriers in most major world trade lanes, said a communique from the association of 12 major shipping lines.

"Increasingly strong estimates of cargo demand and moderated estimates of capacity growth will result in a significantly more balanced supply and demand relationship for 2007 than many had forecast only a short time ago," the statement said.

This finding is a result of a consensus of member carriers following a review of market developments by TSA lines at meetings in Hong Kong this week.

The survey noted continued double-digit world trade growth, driven by Asian exports, that recent capacity growth estimates pointed to a more balanced supply and demand relationship for 2007-2008.

It also noted there had been a consistent recognition by carriers that they must adjust their capacity to reduce costs to better align themselves with market demand, and not just act in the slack season as before, but throughout the year.

A contracting Asia-Europe trade in 2006 led a global downturn in rates, but a "significantly improved environment" in 2007 will enhance conditions on other trade lanes.

TSA also said that there was a recognition by carriers and customers that the costs of landside deliveries have increased over the past two years, and a new awareness of carriers' poor financial results in 2006. There was also a need for improved profitability if the shipping industry is to reinvest to anticipate container trade growth, TSA said.

TSA members include: APL, "K" Line, Cosco, MOL, Evergreen, NYK, Hanjin Shipping, OOCL, Hapag Lloyd, Yangming and Hyundai Merchant Marine.