[ TSA, Rate Restoration Set for May 1 ]

Fitteen major shipping lines serving the eastbound trade from Asia to
the U.S. have resolved to recover a portion of freight revenues lost
during 1996, despite a continued oversupply of vessel capacity in
that trade lane.
Member carriers in the Transpacific Stabilization Agreement(TSA)
agreed at a recent series of meetings that freight rates have fallen
to a point that no longer adequately reflects the full service
transportation and logistics capability offered to shippers.
Accordingly, TSA lines have committed to an increase in tariff and
service contract rates to take effect May 1, from all origin
countries in Asia and separate from previously announced adjustments
to accessorial charges.
The amount of increase remains under discussion as lines continue to
review market and competitive considerations. The timing of the
increase to be recomended corresponds with the renewal of most
eastbound service contracts, the TSA said.
“Carriers lost significant ground on the revenue side in 1995 and
1996,” observed TSA administrator Robert A. Peavy.
“With declines of $600 to $1,000 per container since October 1995,
affecting nearly all major commodity categories, carriers believe
that the market will support a rate restoration effort.”
Peavy emphasized that the TSA policy determination on freight rates
is a logical extension of similar action announced during the past
several months with respect to various origin and destination
accessorial charges.
“The TSA began in late 1996 by focusing on the cost side, to make
sure that carriers weren’t suffering double losses from declining
rates coulped with rising shoreside costs on both sides of the
Pacific,” he explained.
“The next step is to restore tariff and contract rates to acceptable
levels.”