NEW YORK — Amid significant cost uncertainties for importers, an organization of major steamship companies transporting goods across the Pacific is warning that its members will likely raise prices next year by at least 11 to 12 percent.
The group, the Transpacific Stabilization Agreement, said growing congestion on Pacific trade routes, which already is leading to significant delays at West Coast ports, makes the price hikes necessary.
The high price of oil already is driving up both the cost of synthetic fibers, a key component of many apparel products, and boosting the cost of diesel fuel needed to transport goods from ports and distribution centers to stores.
In a meeting in Seoul, the TSA’s 13 members agreed on a range of added charges, according to a statement released by the group. The extra costs include:
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- $285 per standard 40-foot container, known in the trade as FEUs, shipped from Asia to the West Coast.
- $350 on containers that require intermodal service to inland points in the U.S.
- $430 on containers shipped through the Panama or Suez Canal to the East Coast of the U.S.
- In addition to the other charges, the carriers will seek a $400 peak-season charge on goods shipped between June 15 and Nov. 30.
“Routine vessel, cargo handling, equipment and inland operating costs have been rising sharply and the trend is expected to continue,” the group said in a statement.
Hubert Wiesenmaier, executive director of the American Import Shippers Association, which represents more than 200 small and midsize apparel, textile and footwear importers, said, “It’s far too early to take this at face value, of course. Carriers seem to be making money all right. I think they still owe it to demonstrate what justifies any rate increases if they have plans for them….Much will depend on the business climate as we approach the negotiating period.”
AISA negotiates with carriers on behalf of its members. Wiesenmaier said his negotiations typically get serious in February and tend to wrap up by April. His group’s contracts start on May 1, a typical but not universal time for new shipping contracts to commence.
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The volume of apparel and textiles flowing to the U.S. from Asia is expected to pick up significantly next year, after the 148 nations of the World Trade Organization drop the quotas that previously had restricted the trade in those items.
While the carriers do not publicly disclose their per-container charges, according to studies, the cost of shipping a 20-foot cargo container from Asia to the U.S. ranges from $1,500 to $2,000.
The TSA describes itself as a “voluntary discussion and research forum.” It predates the Ocean Shipping Reform Act of 1999, which allowed ocean carriers and their customers to negotiate confidential price agreements, and was intended to promote competition in the shipping industry. Prior to OSRA, shipping rates were a matter of public record and smaller shippers were given the option of demanding the same deals afforded their larger competitors. That public disclosure gave the TSA’s members a powerful incentive to stick together.