TSA (Transpacific Stabilization Agreement) members planning to raise peak season surcharges
June 9, 2006 by SwizStick
Filed under Uncategorized
Remember about a month ago when we talked about and linked to articles discussing how rising demand could affect container pricing?
Well, TSA members are set to raise the peak season surcharge:
A previously announced peak season surcharge of $400 per 40-foot container (FEU) for Asia-U.S. cargo on TSA member vessels will go into effect on June 15. The TSA said this week that surcharges for all-water East and Gulf Coast moves via the Panama and Suez Canals will be raised to $500 per FEU on July 15. And on August 15 the surcharges will be raised to $600 per FEU for the rest of the peak season period until November 15 unless further adjustments are needed.
“The industry expected Asia-U.S. cargo growth to moderate last year and it exceeded even the most optimistic forecasts,†said TSA Executive Director Albert A. Pierce in a statement. “The trade has now seen four record years of mostly double-digit growth. Vessel space is still tight, terminal and rail improvements are still far from completion, equipment turn times are still slow and carriers are concerned; they’re not taking anything for granted.â€
All emphasis ours. Let’s not forget rising BAF either.
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Richard Saunders on Wed, 14th Nov 2007 1:33 pm
Anyone else getting tired of reading about the TSA’s proposed rate hikes ? Are they trying to convince themselves or the shippers ? It’s little more than a marketing blitz right now, socializing the idea of increased costs.
It’s a brilliant strategy. They call themselves a “discussion agreement” and then set strategy around rate increases and surcharges. Unfortunately for them, the exercise if flawed. Carriers do not have the same cost structure and network, so they should not have the same rates, increases, or surcharges. Carriers customers have different lanes, volumes, service needs, etc. These carrier and customer differences make the attempted TSA pricing recommendations seem disingenuous.
Carriers should differentiate themselves based on product offering, service, etc. These are very savvy business people, not “neanderthals” like they’d hope you would believe. They understand their costs, capacity, and know the real fair market prices that will ensure their profitability.
The TSA should focus on transportation infrastructure, security, environmental initiatives, etc. Leave pricing alone.
Everyone wants carriers to be profitable. A competitive environment will allow this to happen, while continuing to drive efficiency and service.
3plwire on Sat, 24th Nov 2007 6:16 pm
Couldn’t agree with you more. Seems like every time we turn around there are talks of either BAF or Rate increases from the TSA. The whole ocean shipping market is becoming extremely commoditized. Just read another article on the JoC that discusses the TSA’s latest reasoning for further increases. Namely – increased fuel, increased volume from Asia to Europe, and increased intra-Asian traffic.