SHIPPING FIRMS WANT TO HIKE 2002 PRICES
Byline: Scott Malone
NEW YORK — A group of major ocean carriers is trying to sail against the tide.
While the slowing economy caused steamship companies to lower their rates for bringing goods from Asia to the U.S. this year, a group of major transpacific carriers this month said that its members would try to raise their rates next year. It’s an effort to keep their revenues stable as demand falls.
In a statement, the Transpacific Stabilization Agreement said: “After steady declines in freight rates during 2001, some form of revenue restoration will necessarily be a key element in [carriers’] 2002-03 contract negotiations.”
Given the slow economy, apparel industry sources expressed skepticism that the rate hike would stick.
A spokesman for the Oakland, Calif.-based TSA, which calls itself “a voluntary discussion and research forum” with 14 major members, declined to say how much its members would seek to raise their rates.
“They are still assessing the market and seeing where things are, but they are in a very difficult position because of the decline in traffic and rates that has taken place,” he said.
In the face of the declining traffic, steamship companies have slashed their prices, returning their rates to 1997 levels, before three years of steady increases.
The TSA spokesman said the group expects volume on Asia-to-North America routes to be flat in the fourth quarter and for the year, up 2 to 3 percent. In the first quarter of 2002, they’re expecting flat volume and up as little as 1 percent in the second.
A spokesman at American President Lines Ltd., a member of the TSA, said: “You would be hard pressed to find a carrier — considering the market environment — for whom rates would not be an issue.”
Hubert Wiesenmaier, executive director of the American Import Shippers Association, a New Rochelle, N.Y.-based group that negotiates rates for its 250 small- to medium-sized apparel importer members, questioned whether the rate hike would stick.
“I’m skeptical that that’s possible,” he said. “The economy is not exactly strong right now.”
He also noted that since rates became confidential two years ago, the TSA’s members have shown less willingness to stick together on pricing actions.
“There is a great deal of individual action,” he said.