- Freight traffic will continue to grow in 2008, on the order of 2-5% by most industry forecasts.
- A combination of market forces – including increased demand and conditions favoring greater profitability in the Asia-Europe and other trade lanes, plus marine bunker fuel prices near $530 per ton – will likely limit some carriers’ transpacific ship capacity through redeployments, slow-steaming and other cost mitigation initiatives.
- Negotiation of a new five-year West Coast longshore labor contract, effective July 1, raises chances for congestion delays and increased costs; rising customer demand for US East Coast all-water services – to diversify service options and manage risk – comes as many of those services, as well as the Panama Canal, are operating at or near capacity.
- Southern California port environmental programs and federal government harbor security initiatives all are scheduled to take effect during 2008, creating the potential for shortages of trained longshore personnel, trucks and drivers, as well as raising regulatory compliance costs.
Trans-Pacific container lines gear up for contract season
Mar 30, 2008 | Published in Issue
Costs outweigh first-half market uncertainty in contract discussions; supply-demand expected to stay in balance; ship utilization remains strong, fuel surcharge talks yield results.Shipping lines that carry US import cargo from Asia are reporting early successes from their cost recovery efforts. While acknowledging short-term concerns due to the slower build up of post-Lunar New Year volumes, they are also reporting high utilization levels and, in some cases with some lines, insufficient capacity to carry all cargo tendered for certain sailings.
Costs continue to dominate early discussions toward upcoming 2008-09 service contracts, which come up for renewal on May 1. The Transpacific Stabilization Agreement (TSA), a research and discussion forum of 15 major Asia-US container lines, reiterated this week that: