Alert: Trans-Pacific Eastbound Sea Cargo Pricing
As of July 1, 2013, member carriers of the Trans-Pacific Stabilization Agreement (TSA) are adamantly clinging to a previously announced General Rate Increase (GRI) in spite of economic realities that dictate otherwise. However, AIT Worldwide Logistics’ buying power and preferred relationships with the ocean lines means we are able to provide a financial cushion for our customers and continue delivering rates that are at or below market level.
TPEB Rate Update
Retroactive to Monday, July 1, 2013, our trans-Pacific eastbound (TPEB) sea cargo rates for 40-foot STD containers and OSPF (Other Sizes per Formula) will increase by $200 for US West Coast destinations and by $300 for US East Coast and IPI (Interior Point Intermodal) destinations. To the best of our knowledge, these are the lowest increases in the industry. Furthermore, AIT’s market research indicates our mitigated increases are 50% less than the average rate increases from other providers.
Market Information and Analysis
As we have seen again and again in the TPEB market, the TSA is attempting to sustain rate increases that are unsupported by current supply and demand levels. Excess capacity continues to be a persistent phenomenon in this lane. The carriers are not experiencing a capacity crunch and therefore, no viable economic reason exists to uphold the GRI.
Given the artificial nature of the TSA’s increase, we expect this GRI to erode and prices to revert to levels that accurately correspond with market conditions. Our expectation is further supported by the fact that the gap between supply and demand is bound to widen even further when new megaships are delivered to carriers in the third and fourth quarters of this year.
AIT Worldwide Logistics remains committed to competitive pricing backed by our best-in-class customer service. We are hard at work to maintain favorable rates for our customers and we thank you for your continued business with AIT as your global transportation management partner.
Please contact your AIT account executive or AIT’s sea operations experts for more information.