Dear Valued Unique Customer,
The below article from the American Shippers appears to be the TSA attempt to justify the announced Trans-Pacific / USA rate increased (GRI) for May (as per the below Sept 22nd e-mail). Many carriers are having to re-negotiate their rail contracts this year with the rail providers (BNSF, Union Pacific, CSX, and/or Norfolk Southern) to it is generally recognized/accepted that there will be freight increases for inland movements via east coast or west coast. The degree of rate change for west coast and east coast direct calling ports will likely be determined by the market in the next several months.
Unique Logistics International will continue to keep you informed on any changes and/or developments as May approaches. We are continuously negotiating with the ocean carriers and evaluating carriers service options on a regular basis to help meet the needs of our customers.
Thank you for your support of Unique Logistics International (ATL).
David Hickmott
Executive Vice President
Office: 404-767-0500 ext 306
Cell#678-478-6604
E-Mail: dhickmott@uli-atl.com
Website: www.uli-atl.com
TSA sees “strengthening market
conditions”
The Transpacific Stabilization
Agreement, which represents 11 major container shipping lines serving the trade
from Asia to the United States, said it “projects strengthening market
conditions in 2007 for ocean carriers in most of the world’s major trade
lanes.”
“While it is still very early in the year, one can see
considerably improved market conditions developing in 2007, based on the
dynamics in the Transpacific trade,” said Ron Widdows, TSA executive committee
chairman. “The trend clearly shows a stronger market than many perceived, and
our industry appears to be getting a bit smarter about how to manage its
business in a challenging environment.”
In a statement released
after a meeting in Hong Kong by members this week, the TSA said, “Increasingly
strong estimates of cargo demand and moderated estimates of capacity growth will
result in a significantly more balanced supply/demand relationship for 2007 than
many forecast only a short time ago.”
The statement comes as
many shippers are negotiating contracts that renew May 1.
The
TSA gave several reasons for its optimism:
* Continued
double-digit world trade growth, driven by Asian exports.
*
Capacity growth estimates which point to “a more balanced supply/demand
relationship for the 2007-2008 contract year.” It noted carriers are taking
steps to “adjust their capacity to reduce cost and better align with market
demands, not just in the slack season but throughout 2007.”
*
“Recognition by carriers and customers alike that the cost pressures impacting
landside delivery costs have increased dramatically over the last two years.”
TSA said U.S. railroads have raised intermodal freight rates as much as 30
percent in 2006 with more increases to come for some.
* “Broad
awareness of the poor financial results that most carriers in the industry
sustained in 2006” and the need for improved profits if carriers “are going to
be able to reinvest to efficiently handle the growth in container trade volumes
going forward.”
TSA members are APL, “K” Line, COSCO, MOL,
Evergreen, NYK, Hanjin, OOCL, Hapag Lloyd, Yangming and Hyundai.
From: David
Hickmott [DHickmott@uli-atl.com]
Sent: Friday, September 22, 2006 5:58
PM
To: Andy Chang; Ginger
Seabrook; jill werkheiser; Sarah Allen
Cc: David Hickmott
Subject: FW: TSA Dismissed overcapacity
fears, seeks rate hikes to cover costs
Dear Valued Unique Customer,
The below article is from this week’s American Shipper. The article is very important as it address the following main issues:
1) Projected General Rate Increase for May 2007
2) Projected PSS for May 2007
3) Peak Season Surcharge extension until February 28, 2007
4) Raising PSS for cargo via USWC
The first two points are valuable information to our customers so that they can project upcoming shipping cost for the next year into their products. It is normal for the carriers to announce their plan for GRI/PSS for upcoming year with advance notice of 6-9 months to prepare the market. This is the initial indication from the TSA carriers. In the past, the market will end up as the driving force of the GRI to be expected. Typically, this becomes clearer picture in March/April preceeding the May increase.
In terms of the 2006-2007 PSS extension, Unique Logistics is further investigating with our carriers as this would have the quickest impact to the market. September 2006 volume has been quite strong from Asia to USA as large retailers are brining in their holiday goods as well as a big push prior to the China Holiday (October 1 – 7th). With ships near capacity with holiday merchandise, the carriers may find this right timing to announce extension of PSS.
Unique Logistics International will continue to negotiate with our ocean carriers on behalf of our customers to keep competitive or ahead of pace with the market. The late October volume will be the true test of volume tolerance on the market and if PSS extension is reasonable. We will keep our customers posted on this subject in particular.
Please note that effective immediately my new e-mail address is dhickmott@uli-atl.com.
Thank you for your support of Unique Logistics International (ATL) Inc.
David Hickmott - Executive Vice President
Unique Logistics International (ATL) Inc.
ph#404-767-0500 ext 306
cell#678-478-6604
E-mail: dhickmott@uli-atl.com
Website: www.uli-atl.com
TSA dismisses
overcapacity fears, seeks rate hikes to cover
costs
Lines in the Transpacific Stabilization
Agreement said today they will seek rate increases in the forthcoming round of
contract discussions "in light of forecasts for continued steep rises in
operating costs."
The TSA carriers recommended across-the-board
freight rate increases of:
* $300 per FEU for cargo moving to
West Coast ports and within "Group 4" West Coast states.
* $650
per FEU for inland point and mini-landbridge intermodal
shipments.
* $500 per FEU for cargo moving all-water via the
Panama or Suez canals to U.S. East Coast and Gulf Coast destinations, as well as
reverse inland point intermodal moves via those coasts.
The
planned increases are intended to take effect as 2007-2008 contracts take
effect, but in no case later than May 1, 2007.
Lines also plan
to implement a minimum $400-per-FEU peak season surcharge for the period of June
15 through Oct. 15, 2007.
Albert A. Pierce, TSA's executive
director, said predictions of overcapacity were unfounded. "New, larger ships
are a fact of life, but they replace ships that are redeployed to other trades,"
he said. "Most U.S. ports can't handle them fully loaded due to channel draft,
terminal or rail constraints. Vessel loading is limited by a mix of equipment
sizes, stability considerations and other factors. We don't see a capacity gap
of more than 2 to 3 percent, and we view that as healthy."
In a
related development, the TSA has also extended its current peak season surcharge
through Feb. 28, "reflecting near-full ships forecast through the remainder of
2006 and a widening cargo and equipment imbalance in the transpacific." It also
recommends adjusting the surcharge to a uniform $400 per FEU for all U.S. coasts
effective Dec. 1.
TSA members are: American President Lines, "K"
Line, COSCO Container Lines, NYK Line, Evergreen Marine, OOCL, Hanjin Shipping,
Hapag-Lloyd, MOL, Yang Ming and Hyundai Merchant Marine.