The Transpacific Stabilisation Agreement (TSA), which represents the interests of 14 major containerlines operating eastbound from Asia to North America, recently revised forecasts for cargo growth in 2002 from 1-3 percent up to five percent, and also announced the intention to increase tariff rates by US$300 per FEU beginning May 1.
The TSA has also decided to extend the effective period of the $300 per FEU peak season surcharge, which will now take effect from June 1 through September 30.
European trades have also shown healthy improvement in recent weeks, with a $200 per TEU rate restoration set for April 1. A liner executive said this is "likely to be 100 percent applied by all carriers" who are members of the Far East Freight Conference (FEFC) liner cartel that covers trades between Europe and Asia.
"After 18 months of constant rate slides, we at last can see the signs that we can stop this deterioration," said Dominique Lovichi, vice-president Asia for French carrier CMA CGM.
Industry professionals attributed the unexpected surge in volumes to a range of factors which offer both short- and long-term potential for increased cargo movements.
OOCL spokesman Stanley Shen observed that demand "has always been there", with the real problem being the oversupply of capacity due to the post-panamax newbuilding binge of most shipping lines. This gap between supply and demand is now narrowing.
Shen also indicated concerns among shippers about possible strikes at US West Coast ports in coming months as militant longshoremen negotiate a new three-year employment contract.
"People may be anticipating something happening, so if there is a strike, people want to ship things out early," he said.
Shippers, particularly in Hong Kong and southern China, have also been finding themselves left short when shipping goods to Europe, with reports of cargo being left on the docks due to ships operating at full capacity.
"There are equipment shortages among a few carriers due to ongoing imbalances and this is causing a few headaches," said Singapore-based Nico Schroeder, Danzas AEI's Asia-Pacific vice president for ocean freight.
Schroeder added that capacity reduction among the containerlines means that the latest efforts to increase freight rates westbound to Europe have a good chance of sticking.
"Shipping lines have taken capacity out of the market during and after Chinese New Year," he said.
CMA CGM's Lovichi confirms that vessel's have been sailing to Europe with a capacity utilisation of close to 100 percent.
"This is encouraging for the rates," he said.
On the Transpacific, OOCL's Shen said volumes were "pretty good" with capacity utilisation greater than 90 percent.
The TSA's announcement on the recommended May 1 freight -rate increase was decided at the March 21 meeting of member lines in Shanghai.
Speaking after the meeting, TSA executive director, Albert Pierce commented that the post-Lunar New Year rebound appeared to reflect "a sustained trend for the coming year."
Backing Pierce's optimism is growing volumes of economic data pointing to a widespread economic recovery in both the US and Europe.
US gross domestic product grew by 1.4 percent in fourth quarter of 2001, while the latest consumer-confidence index surged in March to reach its highest point in 18 months.