NEW YORK — Negotiations between importers and ocean carriers on next year’s shipping contracts are at a critical point with little time left.
Citing rising imports, congested ports and high fuel costs, steamship companies are trying to push through a range of price increases and surcharges that might drive up the cost of shipping goods from Asia to the U.S. by as much as 50 percent on certain routes during the peak season.
Most new annual shipping contracts will take effect on May 1.
The 13 carriers that participate in the Transpacific Stabilization Agreement are pushing for increases of $285 on each standard 40-foot container, known as an FEU, shipped from Asia to the West Coast, $350 per FEU on shipments that go on from the West Coast to inland points via road or rail and $430 per FEU for shipments that go to the East Coast from Asia through the Panama or Suez Canals.
The group is also recommending that its members seek $400 peak-season surcharges for containers arriving between June 15 and Nov. 30, and this month called for additional $115 to $165 per-container surcharges for goods going through the Panama Canal, on top of the suggested $430 boost, because of extra fees being charged by the canal authorities that are going toward enlargement of the canal.
While carriers don’t disclose their base charges publicly, studies have shown that the cost of shipping a container across the Pacific runs between $1,500 and $2,000.
Importers are complaining that the proposed price hikes are difficult to bear, given stagnant retail prices.
“We feel that these increases have to be modified…brought down to a more reasonable level,” said Hubert Wiesenmaier, executive director of the American Import Shippers’ Association, a trade group that negotiates freight rates on behalf of its estimated 200 small- to midsize corporate members. “Our particular problem is always that our members are wholesalers and it’s not so easy to pass on any cost increases to Wal-Mart or Target. They’re getting it from both ends.”
A spokesman for the TSA said it has taken a while for negotiations to take on any urgency.
“Now you’re starting to really see things pick up and move along,” Wiesenmaier said. “Up until fairly recently, it was slow going.”He noted that many negotiators were waiting to get a sense of how heavily congested ports along the U.S. West Coast would be through the summer and fall peak season.
The TSA’s suggested rate increases are a throwback to the era when contracts were public record, allowing small companies to receive the same pricing as their bigger rivals. The Ocean Shipping Reform Act of 1999 allowed carriers and shippers to negotiate confidential contracts.
This year the group has justified its proposed boosts by pointing to the surge in shipments from Asia to the U.S. — the trade is projected to grow by 10 percent to 12 percent this year, to a total of 5.8 million FEUs. The growth has been challenging the world’s trade infrastructure, as evidenced by the backups at West Coast ports such as Los Angeles and Long Beach, Calif., the past two years.
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