WTSA Lines Recommend Adjustments to US-Asia Metal Scrap Freight Rates

Increased demand, regulatory requirements

and fuel costs each play a role in pricing.


Oakland, CA / January 17, 2005 Shipping lines in the Westbound Transpacific Stabilization Agreement (WTSA) have recommended an across-the-board general rate increase (GRI) of US$100 per 40-foot container (FEU) and $80 per 20-foot container (TEU) for U.S.-Asia shipments of metal scrap. The increase, formally adopted in early December and recently filed by individual lines, is to take effect Febuary 15, 2005.

The GRI will apply to carrier tariffs and to service contracts in which marine bunker fuel charges are broken out as a separate item and adjusted quarterly according to a formula that tracks worldwide fuel prices. For service contracts with fuel surcharges included in the basic rates, the level of increase on February 15 will be $145 per FEU and $116 per TEU.  

Asian demand for metal scrap increased sharply during 2004, as industrial production has soared and many sectors have encountered shortages in steel, aluminum, copper and other metals. Overall metal scrap shipments from Asia grew 20% during the first three quarters of 2004 to nearly 180,000 FEU, from 150,000 during the same period in 2003. January-September 2004 shipments to China led in terms of actual volume, with an increase of nearly 15,000 FEU, or 12.7% over 2003. Volumes also grew by 52% to Korea, 41% to Taiwan, 33% to Hong Kong, 244% to Indonesia, and 320% to Thailand.

Difficulties with scrap shipments that pose health and safety hazards has prompted the Chinese government to impose shipper screening and certification rules effective January 1, 2005. This has placed added staff training, paperwork review and other compliance burdens on shipping lines to ensure that cargo and equipment are not delayed or refused entry. Lines have imposed tariff rules requiring shippers to be in compliance with PRC certification requirements. In addition, they intend to limit free time allowances in PRC ports to 10 days, with certain volume customers granted 12 days as a temporary exception.

WTSA is a voluntary discussion and research forum of 13 major container shipping lines serving the trade from ports and inland points in the U.S. to destinations throughout Asia.     

WTSA members include:

American President Lines, Ltd.
China Shipping Group
COSCO Container Lines, Ltd.
Evergreen Marine Corp. (Taiwan), Ltd.
Hapag Lloyd Container Line
Hanjin Shipping Co., Ltd.
Hyundai Merchant Marine Co., Ltd.
Kawasaki Kisen Kaisha, Ltd. (K Line)
Mitsui O.S.K. Lines, Ltd.
Nippon Yusen Kaisha (N.Y.K. Line)
Orient Overseas Container Line, Inc.
P&O Nedlloyd Ltd./B.V.
Yangming Marine Transport Corp.



Contact: Niels Erich
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