TSA dominant hold keeps capacity low, says Shippers Voice

THE Transpacific Stabilisation Agreement (TSA) is holding back the re-deployment of idle and new capacity by exerting a "dominant" position that stifles the marketplace, said Shippers' Voice managing director Andrew Traill.

Dr Traill, who is also policy director of the European Shippers Council, and has served as head of the rail freight policy and the maritime policy for the UK's Freight Transport Association at various times, said that it was no coincidence that capacity was held back at a time when annual contracts are re-negotiated. "The lines are trying to hold out until they get these contracts signed and can impose rate hikes of some US$800 to $1,000 per FEU."

With shippers facing limited choice- lack of space, lack of reliability and longer transit times - the hope is that US Congress concern for exporters will speed up additional capacity.

The holding back of capacity increases has conveniently held prices up for carriers but the situation is breaking down on Asia-Europe with rates falling as a consequence, he said. "All except for India, that is, where roll-overs are becoming more frequent due to capacity having been removed. Needless to say, rates out of India are on the rise."

(Source: Schednet)