Freight Rate Increase and Global Overcapacity Create Dynamic Backdrop for 2012 Trans-Pacific Maritime Conference

Feb 13, 2012, 10:53 ET from UBM Global Trade

NEWARK, N.J., Feb, 13, 2012 /PRNewswire/ -- Ocean carriers' plans to increase import trans-Pacific freight rates by $800 per 40-foot container will be discussed by key industry figures in the opening Market Outlook session of the 2012 Trans-Pacific Maritime Conference, Mar. 5-7, Long Beach, Calif.

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Brian Conrad, executive administrator of the Transpacific Stabilization Agreement -- the 15-carrier group that announced increases on Feb. 9 in a bid to reverse the estimated $5 billion in losses container lines suffered in 2011 -- will participate in a session on Mar. 5.

"If carriers adopt a marginal increase that only partially offsets huge losses as costs continue to rise, the result is another 18 months of losses. This year in particular, rate recovery must be meaningful in order to maintain service levels and, ultimately, carrier viability," Conrad said when announcing the increases.

The panel will also include analysts Martin Dixon of Drewry Shipping Consultants and Janet Lewis of Macquarie Securities, both of whom closely follow container lines and the freight rate environment and will provide independent context to the announcement. Mario Moreno, PIERS/JOC economist, will offer his latest forecast for 2012 trans-Pacific volumes in this panel as well. The TSA announcement and the timing of 2012 TPM come as shippers and carriers begin the annual service contract negotiating cycle that culminates when most eastbound service contracts renew on May 1.

Other TPM sessions will address pressing issues affecting shippers in this market, including: East Coast longshore negotiations; carriers no longer providing chassis; East Coast port readiness for the 2014 Panama Canal expansion and the West Coast response; and regulation of import and export container movements.  

"The market will be in flux headed into TPM this year, with carriers aiming for a large rate increase against a backdrop of global overcapacity but also rising layups," said Peter Tirschwell, senior vice president for The Journal of Commerce. "That, by itself, will make for an interesting Market Outlook session and indeed an interesting event this year."

To hear more about TPM from Peter Tirschwell, the senior vice president of strategy, click here for an audio interview:

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SOURCE UBM Global Trade