Trans-Pacific Carriers Announce February GRI, East Coast Remains Strong

Carrier members of the Transpacific Stabilization Agreement (TSA) have announced another planned general rate increase (GRI) slated for early February. Spot rates on the Asia-U.S. West Coast trades rose just $159 per 40-foot container last week, despite a $600 general rate increase levied by trans-Pacific carriers on Jan. 15 that was accompanied by a $400 peak season surcharge. As of last week, the trans-Pacific spot rate to the West Coast was $2,089 per FEU, an 8.2 percent increase from last week’s rate and 12 percent higher than the same week last year.

Last Friday, the TSA members announced plans to collect another $600 per FEU in a GRI that will take effect on Feb. 9, in anticipation of strong pre-Lunar New Year shipments from Asia to the U.S. They stated the purpose is to cover carrier costs from a slowed winter season.  The increase will apply to all origins and destinations.

While trans-Pacific trade lanes struggle to maintain rates, the East has seen solid rate growth due to unrest and congestion caused by the labor negotiations in the west. East Coast rates were up substantially throughout 2014, reflecting diversions that began early in the year to avoid potential disruption around the July 1 expiration of the West Coast longshore contract. Asia to the East Coast rose $247 to $4,747 per 40-foot container last week, almost double what it was in the same week last year. With ongoing delays at Los Angeles-Long Beach, East Coast spot rates will likely continue upward.