WASHINGTON -- Textile and apparel importers say an overcapacity of cargo space and competition from independent ocean carriers is giving shippers the edge in annual contract talks with the cartel used to ferry the bulk of their goods from the Far...
WASHINGTON -- Textile and apparel importers say an overcapacity of cargo space and competition from independent ocean carriers is giving shippers the edge in annual contract talks with the cartel used to ferry the bulk of their goods from the Far East.
Since its founding in 1986, the Asia North America Eastbound Rate Agreement and its 10-carrier membership typically has had the upper hand in the annual wrangling over some 600 service contracts, scheduled to expire May 1.
"This year, ANERA and everyone else is ignoring the proposed general rate increase," said Tom Eye, international distribution manager for J.C. Penney Co., Dallas. The retailer relies on ANERA to move about half of its 10,000 containers of goods from the Far East each year.
For starters, ANERA has asked for an across-the-board increase of $225 per 40-foot container, or roughly a 5 percent hike. This first request is usually modified when bargaining actually begins. However, this year the modifications are considerably deeper.
Eye expects Penney's to sign a contract this week with an increase of no more than 1 percent.
Wal-Mart Stores, one of the first large shippers to sign an ANERA agreement, also received only a nominal hike, while increasing its shipping commitment to 18,000 containers from last year's 12,000, according to sources. Queries to Wal-Mart were not answered.
"We have found ANERA to be quite flexible," said Hubert Wiesenmaier, executive director of the American Import Shippers Association, New Rochelle, N.Y., who expects to also sign a contract this week. The association represents 60 of the leading apparel importers, including Liz Claiborne, Leslie Fay, Chaus, Gitano, Jordache and Anne Klein, that primarily use ANERA.
"In the past, right up to the last day of April, it was difficult to get even a $5 or $10 concession from ANERA," said Wiesenmaier. He expects this year's increase will be well below the $175 hike ANERA had offered when bargaining opened.
Although the fleet of independent carriers has added sailing times, ports and capacity while offering lower prices, importers dealing with tight deadlines dictated by fashion say they can't function without ANERA. The menu of services provided by its members -- particularly its railway connections -- is essential to insuring on-time deliveries, they say.
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