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Transpacific Ocean Freight Rates Are Increasing. Have You Renegotiated Your Shipping Rates.

Transpacific Ocean Freight Rates Are Increasing! Have You Renegotiated Your Shipping Rates?

Transpacific Ocean Freight Shipping Lines Announce 2013-14 Shipping Contract Rate Increases

In the last six months average ocean freight rates (ocean container FCL rates particularly) have increased nearly 50%. Have you renegotiated your ocean freight rates lately? If not, now is the time! The cost of shipping a standard 40-foot ocean container to the U.S. West Coast from China, the world’s busiest trade route, rose 48 percent to $2,510 this year, based on data from Clarkson Plc (CKN), the largest shipbroker. Transpacific Ocean Freight Shipping Lines are seeking an $800 increase per ocean container in their upcoming annual contract negotiations with shippers.

Transpacific Stabilization Agreement (TSA) Ocean Freight Shipping Lines have adopted a set of contract guidelines, rate and surcharge increase adjustments that they intend to apply to all new and renewed ocean freight contracts, from all Asian origins, to become effective with those contracts, from mid-October going forward. This includes “early bid” ocean freight contracts concluded in late 2012 and early 2013, as well as standard ocean freight contracts which typically take effect on May 1, 2013. The Ocean Freight Shipping Lines are committed to increasing ocean container rates as they head into a new round of 2013-14 contract negotiations with shippers.

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Transpacific Ocean Freight Shipping Lines are recommending rate increases of US$800 per 40-foot container (FEU) to the U.S. West Coast; $1,000 per FEU via all-water to the U.S. East and Gulf Coasts; and $1,200 per FEU for intermodal shipments via all coasts.

The Ocean Freight Shipping Lines also reiterated the need for full fuel cost recovery, including the bunker surcharge increases to help overcome the higher costs of using cleaner-burning fuels within North America coastal zones; and the new, simplified intermodal fuel component – a single component for all inland destinations that will be incorporated into the bunker surcharge and will replace the current inland fuel surcharge, effective January 1, 2013.

Maersk Line controls 9.6 percent of capacity sailing to North America from Asia, according to data from Alphaliner, an industry consultant. The next-largest operators are Geneva- based Mediterranean Shipping Co. and CMA GGM SA, located in Marseille, France. TSA executive administrator Brian M. Conrad said Ocean Freight Shipping Lines have faced a steep uphill climb throughout 2012, to reverse the dramatic revenue losses they must increase ocean freight rates.

Martin Hubert, CEO Freightgate, advises that all shippers should take a serious review of their transportation procurement process to be in an offensive position when negotiating with Ocean Freight Shipping Lines for new shipping rate contracts for the 2013-14 Transpacific contract period. Freightgate, the leading provider of cloud-based logistics solutions, has developed leading-edge procurement software specially designed for ocean freight shippers. They are offering a free procurement software demo, to shippers who are interested in lowering their ocean freight transportation spend while at the same improving their service performance with shipping lines and logistics service providers. The procurement software will help shippers obtain the most competitive ocean transportation rates from ocean freight shipping lines and NVOCC’s. To discuss your ocean freight procurement process call Freightgate (714) 799-2833. Email: sales@freightgate.com , or visit their ocean freight procurement webpage at http://www.freightgate.com/shipper/gtmtrek.php

Transpacific Stabilization Agreement (TSA) Ocean Freight Shipping Lines include a forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S.

TSA Members:
APL Ltd.
China Shipping Container Lines
CMA-CGM
COSCO Container Lines, Ltd.
Evergreen Line
Hanjin Shipping Co., Ltd.
Hapag-Lloyd AG
Hyundai Merchant Marine Co., Ltd.
Kawasaki Kisen Kaisha, Ltd. (K Line)
Maersk Line
Mediterranean Shipping Co.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Ltd.
Yangming Marine Transport Corp.
Zim Integrated Shipping Services

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