CARRIERS WARN OF RISING COSTS: Top executives of the 13 steamship companies that make up the Transpacific Stabilization Agreement warned after a meeting in Dubai last month that they expected to face continued congestion in the coming year. Efforts to boost efficiency will likely push up their costs by about 10 percent, the organization said in a statement.
The rise in shipments from Asia to the U.S. — driven by China’s export growth, a trend that is likely to be accelerated when quotas are dropped next year — is leading to increased congestion at major West Coast ports.
“Member lines and their customers are grappling with transit-time delays of eight to nine days that are largely beyond their control,” said Brian M. Conrad, deputy executive director of the TSA. “Carriers are forced to skip port calls, shift priority cargo to other sailings, burn more fuel to make up schedule time and incur added trucking costs by using alternative U.S. gateways.”
The TSA said it expects cargo volume on the Pacific to grow by 10 to 12 percent next year and warned it expects the supply of space available on ships to lag that growth rate. The group also said its members intend to extend through Nov. 30 their peak-season surcharge of $400 on 40-foot cargo containers being shipped to the East Coast by water from Asia.
The TSA describes itself as a “voluntary discussion and research forum.” The group has existed since prior to the passage of the Ocean Shipping Reform Act in 1999. Before OSRA, carriers had to publish their rates for shipping goods, which provided the group’s members a powerful incentive to stick together. Today, the carriers negotiate individual, confidential prices with their customers.
The TSA’s members are American President Lines, CMA-CGM, COSCO Container Lines, Evergreen Marine Corp., Hanjin Shipping, Hapag Lloyd, Hyundai Merchant Marine, Kawasaki Kisen Kaisha, Mitsui OSK, Nippon Yusen Kaisha, Orient Overseas, P&O Nedlloyd and Yangming Marine.
N.J. PORT VOLUME RISES: The Port Authority of New York and New Jersey reported a 10 percent growth in volume of cargo the port handled through the first six months of the year.
The authority said the facility processed 1.5 million of the standard 20-foot-equivalent-unit boxes, known as TEUs, that are the shipping standard in world trade.
The total value of imports coming into the port came to $43 billion during the period, a 12 percent increase. The authority said one of the fastest-growing categories was women’s and infant’s apparel — 25,000 TEUs of those categories arrived at the port, a 20 percent increase.
Asia was the largest-volume shipper to and from the port, accounting for 42 percent of the volume. Latin American imports and exports accounted for about 13 percent of the volume.
NAFTA TRADE UP: The U.S.’s net trade in goods with Canada and Mexico last year came to $629 billion, according to data released last week by the Department of Transportation.
The figure was up 4.2 percent from 2002 levels, and close to the record high of $657 billion set in 2000. Trade fell off the following year after the terrorist attacks of Sept. 11, 2001.
The North American Transportation Statistics database figure includes the value of all U.S. imports to and exports from those countries. Trucks carried the bulk of the cargo containers crossing the borders — 64 percent — with rail accounting for 15 percent; ships, 6 percent, and air and pipelines, each 5 percent.
Mexico and Canada, the two other nations covered by the 1994 NAFTA deal, are the U.S.’s second and fifth leading suppliers of imported textiles and apparel, respectively. Together, they shipped $10.82 billion worth of those goods to the U.S. during the year ended July, giving them a combined 13.7 percent market share.
The NAFTA trade deal gives duty- and quota-free treatment to all goods made in the region, so long as certain rules of origin are met.