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TSA Withdraws Capacity Discussion Amendment

Lines say time required to comply with the FMC’s information request diminishes potential benefits.



Oakland, CA / February 9, 2009 – Transpacific container shipping lines have advised the Federal Maritime Commission that they will not pursue an amendment to the Transpacific Stabilization Agreement (TSA) that would allow them to discuss potential vessel capacity program options in the Asia-U.S. trade.

TSA filed the amendment on December 18, 2008, to take effect on February 1, 2009 absent any further Commission action after a 45-day review period. The FMC instead issued a formal request for additional information in late January, triggering another minimum 45-day delay. “This would put the effective date of the amendment into late March or April at the earliest,” TSA executive administrator Brian M. Conrad told the FMC in a February 9 letter.  “Since this amendment provides only for discussion authority, and contemplates a further amendment if a program is agreed to, the effective date of any program would then be pushed well into the summer.

“As the challenges facing the carriers continue to mount, time is critical,” Conrad said.  “Given the Commission’s decision to delay the effectiveness of the amendment and the attendant uncertainties that have been created, the members believe that the benefit of this discussion authority, which is urgently needed, is severely diminished.” 

TSA chairman Ronald D. Widdows said Agreement lines are disappointed by the added regulatory delay, and the inability to at least discuss options for addressing transpacific capacity challenges. “The current global financial crisis has created a severe overcapacity situation and threatened transpacific carriers’ financial stability,” Widdows stressed. “TSA members remain convinced that today’s unprecedented trade conditions justify exploring a coordinated approach to more efficient use of vessel assets – an approach that ensures adequate service levels while permitting carriers to operate more efficiently. TSA fully intended for this amendment to broadly benefit the entire industry – shipper and carrier alike – and was committed and prepared to continuously engage the shipper community as we moved through the process.”  

TSA is a research and discussion forum of major container shipping lines serving the trade from Asia to ports and inland points in the U.S.



Members include:
APL, Ltd.
China Shipping Container Lines

CMA-CGM

COSCO Container Lines, Ltd.

Evergreen Line

Hanjin Shipping Co., Ltd.

Hapag Lloyd AG

Hyundai Merchant Marine Co., Ltd.

Kawasaki Kisen Kaisha, Ltd. (K Line)
Mediterranean Shipping Co.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Inc.
Yangming Marine Transport Corp.
Zim Integrated Shipping Services

Contact: Niels Erich
T: (415) 379-1414
F: (415) 358-4540
E: n.erich@comcast.net


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