TSA Carriers Implement and Increase Peak Season Surcharges

The carrier members of the Transpacific Stabilization Agreement (TSA), FMC Agreement No. 011223, serving the East Asia/USA trade lane have recently implemented Peak Season Surcharges as recommended by the group’s 2010 Revenue Recovery Plan. Strong demand for service in the trade has prompted Carriers to implement these surcharges earlier than planned and to amend their tariffs to increase the surcharge amounts later this month or on August 1, 2010.In their 2010 Revenue Recovery Plan the TSA Carriers noted a Peak Season Surcharge (PSS) of US$ 400 per FEU to be effective August 1, 2010. This surcharge was planned to address higher cargo handling and equipment positioning costs during the peak season. Due to strong demand, many of the TSA Carriers implemented a PSS in this trade lane as of June 15. In recent weeks, Carriers have amended their tariffs to increased PSS amounts effective in late July or on August 1. The increased PSS amounts vary; ranging from US$ 600 to $1200 per 40ft ctr. The PSS is generally at the lower range on shipments to US Pacific Coast Ports and higher to US Inland Points and to US Atlantic Coast Ports. Some carriers have included an expiration date of November 30 for this PSS, but many have not included an expiration date for the PSS.This PSS, combined with the current bunker adjustment factors (BAF), and recently implemented General Rate Increases (GRI), produces total ocean freight charges that are at the highest levels seen on in the East Asia/USA trade lane in several years. On the heaviest volume routes, for example, from Hong Kong to Los Angeles, the lowest total freight now available on the spot market is about $2600 per 40ft ctr.The TSA’s 15 carrier members are American President Lines, CSCL, CMA-CGM, COSCO Container Lines, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd Container Line, Hyundai, Merchant Marine, “K” Line, Maersk Line, Mediterranean Shipping, NYK Line, OOCL, Yang Ming Marine and Zim Integrated Shipping Services. Visit www.tsacarriers.org.