TSA announces huge $500/FEU rate increase

…for eastbound Pacific cargo.

HAHAHAHAHAHAHA….oh wait, you’re actually serious?

Shipping lines in the eastbound Pacific announced a huge rate increase effective Aug. 10 of $500 per 40-foot container, which would require an unprecedented renegotiation of service contracts if the lines can pull it off.

The Transpacific Stabilization Agreement, a discussion group of 14 carriers in the Asia-to-U.S. trade, said immediate action is needed to bring freight rates back to compensatory levels.

“The eastbound trans-Pacific trade lane has been driven by panic, and panic is difficult to stop once it has begun,” said W. W. Lee, chief executive for container line business at Hanjin Shipping.

The voluntary guideline announced Tuesday by TSA is likely to meet fierce resistance from shippers, many of whom have recently concluded service contract negotiations for the 2009-10 shipping season and are experiencing financial pressures of their own.

Emphasis mine. I predict “epic fail” for the carriers on this one. These guys are their own worst enemies. They went out tripping over themselves to cut rates in an effort to maintain or increase market share and now that they have belatedly realized that they have cut their own throats in the process they are going to try to turnaround and massively increase rates? It’s called the “market” for a reason, market conditions set the prices, not arbitrary pricing agreement groups. No shipper who recently signed contracts expected to carry them through the next 12 months is going to suddenly agree to a $500 per FEU increase – nobody is going to want to open up their contracts again, and certainly not for a price increase. Notice too that the increase is said to be “voluntary”. That usually means the carriers have wide discretion whether to introduce the price increase or not or whether to implement it fully. I don’t count on it happening.

Popularity in using ocean containers for housing grows

As of an hour ago it was a front page news item on Yahoo!:

While a number of resourceful people have converted shipping containers into make-shift shelters at the margin of society for years, architects and green designers are also increasingly turning to the strong, cheap boxes as source building blocks.

Shipping containers can be readily modified with a range of creature comforts and can be connected and stacked to create modular, efficient spaces for a fraction of the cost, labor, and resources of more conventional materials.

They then highlight, with cool photos, 12 different homes made from shipping containers. We’ve mentioned this phenomenon in the past here and here.

I think I like the ATC (All-Terrain Cabin) and the Ecopods best.

Breaking News: Court rules against LA/Long Beach Clean Truck Program

Via TheTrucker.com:

The U.S. Court of Appeals for the Ninth Circuit ruled in favor of the American Trucking Associations (ATA) today in its lawsuit seeking an injunction against the Ports of Los Angeles and Long Beach Concession Plans.

The three-judge panel ruled unanimously to remand the case to the U.S. District Court and indicated that the judge should grant the ATA an injunction against all or part of the concession plans.

“In short, motor carriers should not be required to adhere to the various unconstitutional provisions in the Ports’ [concession] agreements, and are likely to suffer irrevocably if forced to do that or give up their businesses,” the court’s opinion said. ATA had not challenged the ports’ Clean Truck Program, which bans older trucks and uses a container fee to subsidize the purchase of newer, cleaner trucks.

Here’s more from the Journal of Commerce:

“The district court shall proceed as quickly as possible so that ATA will not suffer unnecessary harm from any unconstitutional provisions,” the appellate court stated. The judges also said they will not entertain a petition for rehearing.

Of most immediacy, it appears that the Port of Los Angeles can not require that harbor trucking companies by the end of this year must replace 20 percent of their owner-operator drivers with employee drivers.

“That requirement is dead,” said Curtis Whalen, executive director of the ATA’s intermodal conference. “We are very pleased with this decision,” he said.

The Los Angeles-Long Beach clean-truck program seeks to reduce pollution from harbor trucks by 80 percent over the next five years. The trucking industry supports that goal and noted that a number of motor carriers have already introduced into their fleets new clean-diesel or liquefied natural gas vehicles that comply with the ports’ strict emission standards.

However, the program also requires that motor carriers sign concession agreements with the ports that govern many aspects of their operations. The 9th Circuit said some of the requirements, such as the employee-driver mandate, financial disclosure statements and truck parking restrictions amount to state or local regulation of interstate trucking. The appellate court said such regulation is clearly preempted by federal law.

Needless to say, the Naural Resources Defense Council, who supported the employee-driver mandate, is not pleased:

“This decision today places in jeopardy the clean air goals at the ports, as well as every port infrastructure expansion project that relies on clean trucks. We’re going to vigorously fight to protect these truck plans in court. Properly maintained, well-managed goods movement at the ports is good for business and good for the health of people living in port communities.”

The funny thing is, I would venture a guess that the ATA and the trucking interests in the ports would agree completely with the last sentence of that paragraph. I can’t find any indication that the trucking industry is challenging any of the environmental elements of the Clean Truck Program, apparently has no problem with the drayage truck registry or the upgrading/replacement of older trucks, etc. It’s only the concessionary agreements, particularly the employee-driver mandate, that they have opposed.

We’ll see what else we can learn about this, but in the meantime, or for those of you who are just stumbling onto this topic, here’s a lot more info for you:

ATA vs. LA/Long Beach port authorities: the battle continues

ATA legal challendes to LA/Long Beach “concession plans” – it’s not over yet.

ATA appeal denied by Ninth Circuit Court

FMC to possibly derail Oct. 1 Clean Truck Plan implementation date?

LA/Long Beach Clean Trucks Program on track to start October 1st

ATA goes to appeals court to stop SoCal ports’ truck plans

ATA takes ports to court over Clean Truck proposals

LA/Long Beach Clean Truck Program approved

Truckers coalition opposes portions of the Clean Air Action Plan

Environmental issues threaten competitiveness in Southern California

Hong Kong Air Cargo Traffic: down 20%

According to this article in Todayonline:

Hong Kong International Airport (HKIA) said it handled 198,000 tonnes of cargo in February, 19.7 percent less than the same month last year, as the global economic downturn took its toll.

February’s fall was despite this year’s Chinese New Year celebrations falling earlier than in 2008, which meant that manufacturing activities in China had resumed.

HKIA also reported a 13.7-percent fall in passenger volume to 3.4 million.

They’re certainly not the only ones. No surprise as the weak global economy saps demand for passengers and cargo.

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