Ocean Freight General Rate Increase - Transpacific Eastbound Trade
Issue 53, August 19, 2009
Please be advised there are some quite dramatic price and service developments underway in the Transpacific Eastbound trade of which we would like to ensure you are aware.
Firstly, the fourteen members of the Transpacific Stabilization Agreement have aggressively pursued implementation of the General Rate Increase they originally announced on July 7th. This took effect as of August 10th, 2009 in the amount of USD 500 per 40’ container applicable for all commodities shipped from Asia to all ports and inland destinations in the USA. In addition, many carriers have announced Peak Season Surcharges, in varying amounts, to be effective during September.
Given the extremely difficult market situation, where rate levels have fallen throughout 2009 to unprecedented levels, the TSA carriers are, in their own words:
“individually modifying their tariffs to reflect the rate increase; invoking applicable contract provisions to make interim adjustments to rates and charges; and initiating discussions with customers as needed to reopen contracts and to modify rates and charges.”
Secondly, this development must be viewed against a backdrop of escalating & well-publicized financial losses being sustained by all of the carriers operating in the trade which has already resulted in various cost-cutting measures, all of which have reduced the number of service offerings in the trade. Indeed, additional service rationalization was announced only recently by three major carriers to be effective in early September, further reducing the vessel capacity available from central & northern China to the U.S. West Coast by some 8000 TEUs per week.
DHL Global Forwarding is always mindful of the interests of our customers & is dedicated to providing market competitive pricing across as wide a spectrum of ocean services as are available in the trade. We are seriously concerned at the overall health of the Transpacific trade and of the likely further degradation of services that would ensue should the trade as a whole fail to support the carriers’ efforts at improving revenue levels. We have, therefore, negotiated increases in costs with all of our carriers to ensure our customers continue to enjoy the best possible service coverage the trade has to offer.
As the availability of shipping space is now broadly in line with cargo demand, & is likely to remain so for the coming two months, your DHL Global Forwarding sales representative will be in contact shortly to discuss how the recent market GRI affects your specific pricing & also to obtain your booking forecasts for September & October. Our goal is to mitigate as best we can the impact of the recent & proposed cost increases to your business while ensuring you continue to receive uninterrupted service.
Kind regards,
Simon Munn
Vice President
Ocean Freight Pricing and Carrier Management
Regional Route Management - North America
