Shipping Group Boosting Scrap Metal Freight Rates

Increased demand, regulatory requirements and fuel costs play a role in pricing.

 

The Westbound Transpacific Stabilization Agreement is calling for an across-the-board rate increase of $100 per 40-foot container and $80 per 20-foot container, for U.S.-Asia shipments of metal scrap. The increase was accepted by member lines last month. The increase is slated to take effect February 15.

 

The rate increase will apply to carrier tariffs and to service contracts in which marine bunker fuel charges are broken out as a separate item and adjusted quarterly according to a formula that tracks worldwide fuel prices. For service contracts with fuel surcharges included in the basic rates, the new rate will be $145 per FEU and $116 per TEU.  

 

Overall metal scrap shipments from Asia increased 20 percent during the first three quarters of last year to nearly 180,000 FEU, from 150,000 the same time in 2003. Jan.-Sept. 2004 shipments to China led in terms of actual volume, with an increase of nearly 15,000 FEU, or 12.7 percent over 2003. Volumes also grew by 52 percent to Korea, 41 percent to Taiwan, 33 percent to Hong Kong, 244 percent to Indonesia, and 320 percent to Thailand.

 

Adding to the decision to rates was the imposition of AQSIQ, effective Jan. 1, 2005. This requirement, the WTSA states, has placed additional staff training, paperwork review and other compliance burdens on shipping lines to ensure cargo and equipment are not delayed or refused entry.

 

Lines have imposed tariff rules requiring shippers to be in compliance with PRC certification requirements. In addition, they intend to limit free time allowances in PRC ports to 10 days, with certain volume customers granted 12 days as a temporary exception.    

 

WTSA is a voluntary discussion and research forum made up of 13 major container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia.