Asia to U.S. Shipping Costs to Climb

Claiming that even a moderate peak season will mean disruptions for them, particularly in all water shipments to the U.S. East Coast, TSA members instituted a $400 per 40 foot container (FEU) surcharge on June 15. Beginning July 15, the surcharge will increase to $500 per FEU for cargo moving from Asia to U.S. East Coast ports via the Suez or Panama Canals. The surcharges will move to $600 per FEU on August 15 and end on November 30, the end of the peak season period.

Explaining the increase, Albert A. Pierce, TSA executive director, says that, “The industry expected Asia-U.S. cargo growth to moderate last year and it exceeded even the most optimistic forecasts. The trade has now seen four record years of mostly double-digit growth. Vessel space is still tight, terminal and rail improvements are still far from completion, equipment turn times are still slow and carriers are concerned – they’re not taking anything for granted.”

Statistics cited by Pierce include the fact that first quarter 2006 Asia – U.S. container volumes climbed 9.8% year over year to a total of 1.4 FEU. Too, he notes about 25% of containers moving through U.S. container terminals are empty, being repositioned as part of a transpacific round trip with no revenue contributed to repositioning costs.

Peak season surcharges for U.S. West Coast port-to-port cargo and for inland and mini-land bridge intermodal shipments will remain at $400 until November 30.

Pierce says that, “Customers tell us they want above all else service choice, schedule choice and equipment availability. This is a high-cost, high-stakes game for all of the parties involved. Shipping lines cannot afford to be caught unprepared.”

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