A container shipping organization urged companies to raise Asia-U.S. freight rates by at least $600 per 40-foot container (FEU), corresponding to an increase of 14.2 percent from current levels, from Sept. 1.
TSA (Transpacific Stabilization Agreement) said the planned increase follows strong cargo demand and high vessel utilization levels in recent months, which forward bookings suggest will continue through September.
Its members include 15 of the world’s biggest container shipping lines such as Denmark’s Maersk Line, a unit of A.P. Moller-Maersk, privately owned Switzerland-based Mediterranean Shipping Company (MSC), French privately held CMA CGM, China’s COSCO Shipping, Korea’s Hanjin Shipping and others.
“Lines have made modest revenue gains to date this year, but they continue to struggle in terms of returning to profitability,” TSA Executive Administrator Brian Conrad said in a statement.
TSA had also urged its members to hike freight rates by $600 per 40-foot container from Aug. 1, but rates have rapidly eroded since then.
The container shipping industry has been struggling with overcapacity because vessel capacity is outstripping volumes of goods for transport as a result of the global economic downturn.
Over 90 percent of the world’s trade is carried by sea, but freight rates plunged to unprofitable levels for most carriers in 2013 as a result of overcapacity in the market.
Spot freight rates are calculated and published every week by Shanghai Shipping Exchange. Last week rates for transport of 40-foot containers from Asia to the U.S. West Coast stood at $4,218. (Reuters)