US-Asia wastepaper container carriers plan rate increases

April 10, 2007 - Major U.S.-Asia container carriers say they plan a two-stage series of freight rate increases for wastepaper during 2007, according to WTSA.

Member lines in the Westbound Transpacific Stabilization Agreement (WTSA) are recommending an initial US$100 per 40-foot container (FEU) increase in wastepaper rates for inland point and coast-to-coast minilandbridge intermodal shipments, effective May 1, 2007. All-water, port-to-port rates are also expected to see an increase sometime after May 1, with the precise amount and timing still to be determined, WTSA said.

Later in the year, WTSA is recommending a second-stage increase for intermodal rates only, of another $100 per FEU, to take effect on September 1, 2007.

WTSA said that wastepaper rates are among the lowest in the trade, for a commodity that historically accounts for 20% of the market by volume. This has presented operational and cost difficulties in a market that faces a near 3:1 imbalance of cargo and equipment inbound to the U.S. versus outbound to Asia, and in which inland transport, cargo handling, maintenance and other fixed costs together have risen steadily.

Carriers are under growing pressure to reposition containers quickly with Asian manufacturers, as well as recover full operating costs over the round trip sailing. This in turn has placed sustained upward pressures on wastepaper rates, WTSA added.

WTSA members include:

  • American President Lines, Ltd.
  • COSCO Container Lines, Ltd.
  • Evergreen Marine Corp. (Taiwan), Ltd.
  • Hanjin Shipping Co., Ltd.
  • Hapag Lloyd Container Lines
  • Hyundai Merchant Marine Co., Ltd.
  • Kawasaki Kisen Kaisha, Ltd. (K Line)
  • Nippon Yusen Kaisha (N.Y.K. Line)
  • Orient Overseas Container Line, Inc.
  • Yangming Marine Transport Corp.

WTSA is a voluntary discussion and research forum of 10 major ocean and intermodal container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia. Information on all recent and scheduled guideline actions adopted by WTSA can be found on the Agreement's web site, www.wtsacarriers.org .


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