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TSA Recommends Rise in Transpacific Container Freight Rates

February 5, 2015 12:10 am Published by

The TSA has recommended that container shipping companies raise their Asia-U.S. freight rates by at least $600 per 40-foot container (FEU), beginning February 9th, 2015. The organization also suggested that a second $600 per FEU increase should occur on March 9th, 2015. The recommendations would see freight rates increase 30.3 percent and 23.3 percent, respectively.

The planned freight rate increase follows strong demand for container shipping services through out the (typically) slower winter season, and into the Lunar New Year holiday.

Although some analysts say that the container shipping industry has been struggling with over-capacity since the global economic downturn in 2008, the TSA's Executive Administrator believes that the excess vessel supply reported globally is often overstated, particularly in the transpacific.

The primary imbalance in the transpacific is not so much one of supply versus demand, but rather one of costs versus revenue, that in turn drives service.- Executive Administrator of the TSA

Founded in 1989, the Transpacific Stabilization Agreement (TSA) is regarded as a "research and discussion forum of major container shipping lines," serving trade routes from Asia to the United States. Fifteen of the world's largest container shipping lines are currently members of  the TSA, including Maersk Line – a unit of A.P. Moller-Maersk, the Mediterranean Shipping Company (MSC), CMA CGMCOSCO Shipping, Hanjin Shipping, and nearly a dozen more.

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