May 27, 2008
Source: American Shipper Online
U.S. exporters already
encountering difficulties shipping their goods abroad have been
told they must pay more to cover shipping lines' mounting operational
costs.
Brian M. Conrad, executive administrator of the Westbound Transpacific
Stabilization Agreement, a discussion and research forum for
10 ocean carriers serving the trade from U.S. ports and inland
points to destinations throughout Asia, said WTSA lines have
secured modest, incremental freight rate gains in the past two
years, but not enough to match the rise in inland transport
and equipment-related costs.
"With the inbound Asia-U.S. trade flat, and with fuel,
inland intermodal and other costs rising, westbound traffic
must truly begin to pay its own way," he said in statement
issued today.
The weak dollar has boosted demand for U.S. goods, yet exports
are being stymied by cutbacks in transpacific vessel tonnage
and trouble finding containers or the equipment needed to move
them.
Conrad pointed out that the situation is exacerbated by the
export centers of production often being a long way from where
container imports are delivered.
"Unfortunately, retail merchandise from Asia is not delivered
anywhere near where pork, cotton or chemical resins are loaded
for export. Sometimes specialized equipment is required. Positioning
that equipment entails transport, storage and handling costs
that lines will continue to recover through the base rate structure,"
Conrad said.
The WTSA executive expects the same operational factors as well
as soaring fuel prices to force freight rates higher in the
near to mid-term. The WTSA's member lines are this year looking
to introduce full, floating bunker fuel surcharges in all contracts
to cover what Conrad said has been a 60 percent increase in
operating cost per slot over the last 18 months as a direct
result of fuel prices doubling since January 2007.
"In many cases carriers are not recovering the pre-2007
base cost, let alone that increase," he said.
Under a previously announced schedule, WTSA carriers will July
1 raise their bunker surcharges to $600 per 40-foot container
(FEU), or the full formula level in effect at the time, whichever
is lower. As of Oct. 1, surcharge levels for all tariff and
contract cargo will be increased to the full, floating bunker
surcharge in effect at that time, and will then be adjusted
monthly to float with fuel price fluctuations under the WTSA
calculation formula.
WTSA members are APL, COSCO Container Lines, Evergreen Line,
Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K"
Line, NYK, OOCL and Yang Ming.



