Trans-Pacific Container Market Surging

The surge in imports from Asia that has caught carriers and their customers by surprise will continue at least into the autumn peak-shipping season, says a shipping executive.

"Carriers are now seeing a strong peak-season surge that could last for some months," said Y.M. Kim, president and chief executive of Hanjin Shipping.

The Transpacific Stabilization Agreement, a research and discussion forum of 15 carriers in the eastbound Pacific, said containerized imports from Asia in the first quarter increased 13 percent compared to the first quarter of 2009.

Imports continued to surge this spring, with TSA member lines reporting that in May their volume to the West Coast increased 24.1 percent and shipments to the East Coast increased 30.8 percent compared to May 2009.

The summer-fall peak-shipping season is likewise projected to be especially busy. TSA quoted National Retail Federation projections that call for a 12.6 percent increase in retail import shipments during the period June to October, compared to the same period last year.

June and September are projected to be especially busy, with volume increasing 15 percent each month compared to the same months in 2009, the NRF stated.

"Despite a pull-back in U.S. job creation and retail sales in May, the pipeline of Asian exports to the U.S. is filling rapidly and consumers are more optimistic over job security and household incomes going forward," said Eng Aik Meng, president of liner services at APL.

Carriers nevertheless say their revenues are not high enough to pull them out of the abyss they were in last year when the trade collectively lost $15 billion. "Carriers say the increases achieved in the current contract round still do not fully restore rates to the levels of late 2008," TSA said in its release.

TSA member lines intend to move forward with their previously-announced peak-season surcharges of $400 per-40-foot container to take effect on Aug. 1.

However, some lines are not waiting until August to increase their rates. They are negotiating immediate rate increases in confidential contract negotiations with customers. Some of the increases track the Drewry spot rate index for a cargo consolidator shipment from Hong Kong to Los Angeles. That rate last year hit a five-year high of $2,607 per-FEU.
(Source:www.joc.com)