The Hindu Business Line : Asia-US container freight rates to go up from June 15

Container freight rates between Asia and the US will go up from June 15. This follows a previously announced peak season surcharge of $400 per FEU (forty-foot equivalent unit) to be levied by member lines of the Transatlantic Stabilisation Agreement (TSA).

In addition, effective July 15 surcharges for all-water East and Gulf Coast moves via the Panama and Suez Canals will be increased to $500 per FEU.

Effective August 15, those surcharges will be set at $600 per FEU through the rest of the peak season period ending November 30, unless further adjustments are required.

The peak season surcharge for US West Coast port-to-port cargo and for inland and mini land bridge inter-modal shipments will remain at $400 for the entire June 15 to November 30 period, according to the TSA, a voluntary discussion and research forum of 11 major container shipping lines serving the trade from Asia to ports and inland points in the US.

To affect Indian ports

The announcement would impact freight rates from Indian ports. However, sources in the shipping industry feel though shipping lines respect the TSA announcement, an increase in the rate would depend on the supply and demand situation. "If the ships are full we will charge a premium. But, we cannot do the same when the ships are empty," a source said.

In the last one year there has been no major change in freight rates between Chennai and the US ports. For a twenty foot equivalent unit (TEU) the freight rate to the US East Coast is about $2,000 and to West Coast $1,700, the source said.

Shippers' concern

Container shipping lines operating from Asia to the US are concerned that even a modest peak season surcharge in the summer and fall months will cause disruptions and have major cost impacts on their operations, particularly with regard to East Coast all-water shipments. As a result, member lines in the TSA say they intend to phase in higher peak season surcharges in those market segments as the season progresses.

TSA Executive Director, Mr Albert A. Pierce was quoted in the statement, which is available in TSA Web site, that in the first quarter of 2006 container volumes from Asia totalled 1.4 million FEUs, up 9.8 per cent from the same period in 2005, and China having a major share of the cargo.

An average of one in four containers moving through US container terminals is an empty unit being repositioned, most as part of a transpacific round trip, with no revenue contribution toward repositioning costs.

TSA members include American President Lines, Kawasaki Kisen Kaisha, Cosco Container, Mitsui O.S.K., Evergreen Marine, Nippon Yusen Kaisha, Hanjin Shipping, Orient Overseas, Hapag Lloyd Yangming Marine and Hyundai Merchant Marine.