Industry-leading container shipping lines have decided to raise Asia-U.S. freight rates by $300 per 40-foot container (FEU) earlier than expected. The increase will take effect on April 15, 2014 instead of May 1, 2014. The increase was agreed by the Transpacific Stabilization Agreement (TSA), whose executive administrator Brian Conrad explained that the recent decrease in rates had misrepresented conditions in the Asia-U.S. freight market. In 2013, freight rates decreased to loss-making levels for several shipping companies as a result of overcapacity in the market. The increase in freight rates represents an emerging container shipping economy and steadily improving Asia-US trade.
Founded in 1989, the TSA labels itself as a research and discussion forum of major container shipping lines, which serve the trade from Asia to the United States. The TSA is comprised of 15 of the world's biggest container shipping lines, including Denmark's Maersk Line, a unit of A.P. Moller-Maersk, privately owned Swiss-based Mediterranean Shipping Company (MSC), French privately held CMA CGM, China-based COSCO and Korean giant Hanjin Shipping. In addition, the TSA also raised Asia-U.S. rates on January 15 and March 15. Moreover, spot freight rates are calculated and published every week by Shanghai Shipping Exchange and just last week rates for transport from Asia to the U.S. West Coast stood at $3,287 per 40-foot container. Similar to the TSA, liner shipping was previously organised in similar groups called "liner conferences" which met to discuss market conditions, freight rates and other common concerns. Nevertheless, the European Union decided in 2006 to ban the practice as against competition rules and the ban took effect in 2008.
As the Asia-US trade strengthens and freight rates increase, the shipping industry moves closer and closer to full recovery. In addition, the global economy has bounced back from the financial crash of 2008, and as a result international trade has steadily improved.