Trans-Pacific Carriers February GRI Next Week, Announce Future Rate Increases

Carrier members of the Transpacific Stabilization Agreement (TSA) have announced future general rate increases (GRIs) slated for March and April, following the GRI that will be imposed beginning next Monday.

In early January, the TSA members announced plans to collect another $600 per FEU in a GRI that would 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. 

This week, the TSA recommended a second $600 per-FEU rate hike on March 9, with an April increase likely to follow, in an amount to be determined and announced later. Under U.S. shipping law, members of the TSA are able to discuss, with immunity from antitrust laws, pricing and related issues. However, since it is a discussion group, TSA has no enforcement powers and can only recommend rate hikes based on research and market analysis. Its member lines price their services independently and confidentially with their customers. Over the past two years, many of the TSA’s suggested rate hikes lasted a week or so before deteriorating steadily.  

TSA member lines also recommended increases in previously-announced guideline minimum service contract rates. Service contracts, most of which last for one year, are negotiated confidentially between individual shipping lines and their customers. TSA recommended a minimum service contract rate increase of $300 per FEU to the East and Gulf coasts and $200 per FEU on intermodal shipments to Chicago. 

U.S. imports increased sharply in 2014 and are projected to increase again this year. PIERS, the trade-data subsidiary of the JOC Group, reported a 6.1 percent increase in containerized imports in 2014. JOC Economist Mario Moreno and projects 6.8 percent growth in 2015.