The TSA (Transpacific Stabilization Agreement) announced history shattering rate hikes on trans-pacific routes. The expected new rates will be more than $1000 per FEU once the new rates kick in on January 15th.

The new planned rates hikes are a combination of several rates rolled into one general surcharge. We are looking at an extra $400 per FEU peak season charge, and an additional $600 per 40-foot container. The new cargo surcharges are strategically planned to kick in just before the Chinese new-year.

“Carriers are trying to hold down rising costs as freight volume begins to increase to meet increased demand from the Chinese New Year. We have gone through yet another year where we saw very little gains; we just cannot continue this trend as we begin a new contracting season.” Brian Conrad TSA

The spot rate from Hong Kong to Los Angeles has already rose 40% (roughly $680) this week alone, due to the TSA announcement. This new planned rate hike is the 2nd such rate hike in such a short period of time, the TSA attempted to raise rate by $1000 just 3 days ago, but was forced to postpone plans until January.

The new GRI is in response to the TSA member carriers trying to reverse slipping freight prices and declining profits. This peak season surcharge is due to shipping capacity being severely strained as shippers franticly push to get cargo moved due to upcoming Chinese Holiday.

The latest GRI implemented by the TSA on November 15th totaling $600 per-FEU helped shore up shipping rates by $300. This rate increase was in vain though, as the GRI gains evaporated as spot cargo rates dropped more than 17% in 4 weeks.

Congestion in the southern California ports is still on the minds of shippers as the TSA holds firm on the planned Jan. 15th rate increase. Carriers are drowning in operating costs as the port congestion issue drags on with no end in sight. Despite the increased operating costs, carriers are holding true to their promise to the U.S. FMC (Federal Maritime Commission) that there would be no additional congestion surcharges until after the Christmas & New year’s holidays have passed.

Member carriers of the Transpacific Shipping Aliiance (TSA) are as follows: Hanjin Shipping Yang Ming and Zim Integrated Shipping Services, OOCL, Hyundai Merchant Marine, Mediterranean Shipping China Shipping Container Lines, CMA CGM, Cosco Container Lines, Evergreen Line, , Hapag-Lloyd, , "K" Line, Maersk Line, CO., NYK Line, , APL.

Questions / Comments? Contact: Mark@cmaritime.com.cn