|
Shippers protest Asian rate hikes
By Manoj Aravindaksham
Singapore—Shipping rates between Canada and Asia will rise May 1, 2005. Rates are also going up on routes between the US and Asia, according to The Transpacific Stabilization Agreement (TSA), a forum of 13 major container shipping lines serving the Asia-US cargo trade. The carriers cited increasing operating costs as the reason for the rate hike.
As of May, it will cost US$190 more to ship a 20-foot container from Asia to Canada’s west coast. Rates have also gone up for other container sizes and Canadian destinations. The Asian Shippers Council (ASC) is protesting the increase. “TSA is merely using the present supply situation as an excuse. Instead of having to pay higher surcharges, shippers deserve to be compensated for delays. Many shippers have had to resort to air freight at considerable cost because of the west-coast congestion, and some are facing claims from buyers for late delivery,” said ASC Chairman John Lu, in a press release.
Industry analysts predict US retailers will fight against further rate increases, reported Singapore’s The Shipping Times. It pointed to a recent Merrill Lynch report suggesting companies might decide to set up regional distribution facilities and hold more inventory, rather than pay higher shipping costs without assurance they’ll receive their goods on time.
The TSA defended the rate hikes, pointing to increasing costs for port security and congestion fees; a dramatic increase in Panama Canal fees; new cargo inspection regimes; and added equipment costs as eastbound versus westbound imbalances widen.
“Ocean carriers feel the pressure from shippers to provide the equipment and space, and to meet tight schedule requirements. However, other supply chain parties such as ports...pass their costs to ocean carriers,” said Brian Conrad, TSA deputy executive director.
Manoj Aravindakshan is a Singapore-based business journalist.
|
