News
Member carriers in the Transpacific Stabilization Agreement (TSA) concluded CEO-level meetings in Taipei with a positive but cautious assessment of the Asia-U.S. freight market going forward, forecasting 6-8% cargo growth for 2010. But the lines noted that market conditions remain uncertain in the Asia-U.S. trade, and that revenues are still well below sustainable levels.
As they head into months of steadily intensifying service contract negotiations, TSA lines reiterated their support for the recommended TSA guideline rate increases of US$800 per 40-foot container (FEU) for cargo moving to the U.S. West Coast, and $1,000 per FEU for cargo moving to the U.S. East and Gulf Coasts, as well as U.S. interior points, via all-water or intermodal services. The increases would take effect in most cases on May 1, 2010.
Even if the scheduled increases are fully achieved, TSA said, that will at best restore some but not all freight rates to late 2008 levels, which were viewed at the time as barely compensatory.
Container lines in aggregate lost, by various estimates, $15-20 billion in 2009 worldwide as the direct result falling demand and a corresponding decline in rates, and liner shipping industry return on capital invested fell to -6.5%. Drewry Shipping Consultants estimates further losses of more than $7 billion for first quarter 2010.
