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The below article from the American Shipper is one of the first announcements from the TSA (group of ocean carriers) regarding the 2006/2007 contract season. The specific target for GRI has not yet been announced. The below article is some pre-liminary posturing by the carrier groups why increases should be forthcoming for 2006/2007. As soon as we have the announcement of projected GRI, IFF will pass to our customers as normal so that these can be considered for future pricing, catalogs, and freight costing for upcoming year.
Carriers push for higher rates to cover costs
Carriers in the Transpacific Stabilization Agreement (TSA) said today they will seek rate increases "reflecting structural changes in the market that have led to sustained higher volumes, service requirements and costs," in the forthcoming round of contract discussions.
"A 60 percent increase in Panama Canal round-trip transit costs; a ratio of eastbound equipment and loads to westbound of 2.5 to 1; significant carrier investment in shoreside terminals; and empty containers making up a third to half of total throughput at major ports. All of these components make cost recovery the top priority for carriers in 2006-2007," Pierce said.
The TSA expects inland rail delays, truck driver shortages, as well as congestion and delays in the Panama Canal to reduce the effective capacity of new and bigger ships joining the transpacific trade lane next year.
Last week the TSA said its carriers were formulating a revised method for applying fuel surcharges in a bid to recoup millions of lost dollars. Today, the TSA lines said they will extend the peak season surcharge for all-water Asia/U.S. East Coast services through Jan. 31. "That segment of the market is expected to run at full capacity through early 2006 and will entail higher round-trip sailing costs than port-to-port or intermodal West Coast service," the TSA said.
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