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By Brian Milligan, News and Transportation Editor -- Purchasing, 2/22/2001 7:00:00 AM
The race is on to try and raise rates for eastbound trans-Pacific ocean cargo trade. But it's a race that need not be run. The Transpacific Stabilization Agreement is the one that caused ripples in the ocean shipping realm in October 2000.
The agreement's member carriers sought general rate increases ranging from $525 for shipments moving from Asia to U.S. West Coast ports to $700 per 40-foot container for shipments for inland point intermodal cargo.
The call for the rate hikes are unfair. They are unfair because they were made at a time when carriers predicted volume in 2001 would exceed the previous year. But with a slowing U.S. economy, that prediction is proving dubious. And to be polite, agreements like this have lost their bite. In the deregulated environment, the majority of ocean cargo moves under service contracts. Shippers and carriers negotiate rate agreements in confidential negotiation sessions. They should work on their own contracts.
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