From: David Hickmott [DHickmott@uli-atl.com]

Sent: Tuesday, June 12, 2007 3:28 PM

To: David Hickmott (E-mail)

Cc: David Hickmott; David Hickmott

Subject: TSA hikes peak season surcharges as cargo demand strains network

Dear Valued Unique Logistics Customer,

Kindly see the below article from June 12^th American Shipper.  TSA has announced increase of PSS by additional $200/40’ (i.e. increased to $600/40’ from previous announced $400/40’).  Unique Logistics International is continuing to monitor the PSS offered within the market via various trade routes (AWS, BASE or IPI/MLB) which can vary.  The current trend in the market is toward higher PSS than previously announced TSA guidelines (www.tsacarriers.org) .   In past years, the market will typically guide the PSS level and duration. 

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 hikes peak season surcharges as cargo demand strains network
The Transpacific Stabilization Agreement said today its member lines are reporting close to full vessel sailings from Asia to all U.S. coasts as the peak season nears, and with concerns over network constraints are adopting a $200-per-FEU increase to their peak season surcharges, from Aug. 1 through Oct. 31.
   The TSA said that during May vessel utilization averaged 86 percent to the Pacific Northwest, 95 percent to California ports and 91 percent through the Panama Canal. Forward bookings heading into June show increases to the 90 percent to 95 percent range in the Pacific Northwest, and 95 percent or more for California and U.S. East Coast all-water services, with those levels expected to increase further through the summer, the TSA said.
   The TSA rationalized the surcharge rise due to fears over productivity slowdowns through a long July 4 weekend, inland rail congestion, and the Panama Canal operating at full capacity. These network capacity constraints have already produced equipment shortages resulting in some Asia cargo being bumped to later sailings while strong cargo growth in the Asia/Europe and intra-Asia trades has further tightened space and equipment availability, the TSA added.
   "Retail sales are strong and business spending is increasing to replenish inventories," said TSA executive Brian M. Conrad. "Cargo growth is moderating relative to last year, but it's on track with earlier forecasts of 10 percent to 11 percent in an end-to-end system that's seriously strained.
   "Anyone waiting for ships lined up at anchor in Southern California as an indicator of congestion misses the point; even small disruptions can produce big problems with marine terminals operating at full capacity, harbor trucking delays, backed up rail ramps, empty containers stranded inland and missed delivery schedules -- all things that contribute to the higher costs which the peak season surcharge is intended to address."
   Conrad also noted that transpacific ships are carrying more "out of scope" cargo from adjacent trades, such as the Indian subcontinent or Australia, or Asia/Latin America traffic, which he said is also putting pressure on equipment and making space tighter.
   "Carriers are allocating and managing their vessel and equipment assets as efficiently as possible, across multiple trades, to meet increasing customer service requirements," Conrad said. "This makes planning and resources to cover peak contingencies all the more important."
   The TSA members are APL, "K" Line, CMA-CGM, Mediterranean Shipping Co., COSCO Container Lines, MOL, Evergreen Line, NYK, Hanjin Shipping, OOCL, Hapag-Lloyd, Yang Ming and Hyundai Merchant Marine.