WTSA Plans Freight Rate Adjustments

The Westbound Transpacific Stabilization Agreement (WTSA) has been reviewing its members’ freight rates and has started to schedule adjustments for particular commodities. According to the WTSA, the adjustments are based on prevailing rate levels, competitive considerations and overall market conditions. Most rate adjustments are scheduled to go into effect November 1, 2011.

The WTSA is a voluntary discussion and research forum of 10 ocean and intermodal container shipping lines serving ports and inland points in the United States to destinations throughout Asia.

The WTSA claims the decision to make the adjustments follows freight rates for major commodity categories that have approached what it calls “unsustainable levels” in recent months in the U.S.-Asia trade lane. The WTSA says reviews are being conducted by subcommittees of shipping lines with expertise and market participation in specific commodity areas.

Initial cargo segments reviewed for rate adjustments include recovered paper and metal scrap and plastic scrap.
WTSA lines will notify accounts as levels are determined, and adjustments will be posted on the WTSA website. 
Brian Conrad, WTSA’s executive administrator, says some westbound transpacific rates have approached levels below carrier costs, and rate increases are necessary to make the carriage of some cargo financially feasible. A previous round of scheduled increases last July had only limited success, Conrad says, and levels have eroded further since then.

“We’re hoping that market fundamentals will be more supportive of rate improvement in the coming months as we move into the winter period when westbound volumes typically start to improve,” Conrad adds. 
More information is available at www.wtsacarriers.org.