A Significant rate hike is expected from container freight rate talks between Japanese-affiliated shippers and liner operators in the-Japan-Europe trade, Marine Net reports.
Though the content of each contract will differ, it looks as if the parties are heading for a Japan-to-Europe settlement involving a rate hike estimated at US$700-$800 per FEU, said the agency.
Meanwhile, American Shipper reports that container lines carrying US-bound cargo from Asia are experiencing "early success with cost recovery efforts."
The Transpacific Stabilisation Agreement, the quasi-conference of 15 major Asia/US lines, said "costs continue to dominate early discussions toward upcoming 2008-2009 service contracts, which come up for renewal on May 1."
TSA is reportedly seeking $400 per FEU rate hikes to the west coast, and $600 for intermodal and east coast all-water shipments, together with a $400 per FEU peak season surcharge from June 1 - October 31.
"Even with substantial cost recovery, the US market from Asia will still result in a challenging profitability picture," said TSA chairman and APL CEO Ron Widdows.
Mr Widdows said mounting fuel, inland transport and equipment positioning costs obstructed the industry's profitability in the coming year on the transpacific trade
"Rail rates are up 30 per cent, with fuel surcharges added on," he said. "Marine fuel prices have risen more than 75 per cent since January 2007. The costs of moving containers through port gateways and the Panama Canal are rising steadily. The result of operating a ship at less than full utilisation in that environment - at rates that in many cases barely cover costs, if at all, is clearly not sustainable."
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