Asia-U.S. container lines, still heavily reliant on intermodal service, have now been forced to respond with intermodal door delivery charges to recover those costs.
Congested U.S. port terminals, harbor and over-the-road truck and driver shortages, slower trains and longer rail terminal dwell times due to increased domestic rates have not only disrupted service but also driven intermodal rates and cargo handling costs up sharply.
Asia-U.S. container lines, still heavily reliant on intermodal service, have now been forced to respond with intermodal door delivery charges to recover those costs.
As announced previously, most member lines in the Transpacific Stabilization Agreement (TSA) are moving forward individually with charges of $100 per 40-foot container (FEU), and $90 per 20-ft container, effective on or around November 15, 2014, but by no later than December 1. The charges apply to all cargo moving under intermodal store-door delivery through rates from Asia to the U.S.
TSA executive administrator Brian Conrad noted that congestion and associated costs are the result of a convergence of factors, among them equipment interchange issues, railcar shortages, freight backup at intermodal terminals and a shift of intermodal cargo to more costly pure truck moves.
“These are systemic issues that will get resolved over time, but in the midst of the peak season and with demand still strong, we don’t have time,” he said. “Carriers are doing their best given the service and infrastructure constraints we see across the supply chain. For now, as we all work on solutions, the key is cost recovery.”
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