Transpacific Stabilization Agreement aims to simplify contracts

The members of the Transpacific Stabilization Agreement (TSA) have filed an amendment with the U.S. Federal Maritime Commission (FMC) that would expand TSA’s scope to include the entire transpacific round trip, including the westbound trade.  It is expected that once the amendment becomes effective, the lines would suspend activities of the existing U.S.-Asia carrier group, the Westbound Transpacific Stabilization Agreement (WTSA).  TSA filed the amendment for a 24-month trial period, subject to review at the end of that time.

As reported in LM last August, APL was the latest carrier to opt out of the WTSA.

Streamlining the agreements and cutting cost is the primary purpose of the filing, said TSA Executive Administrator Brian Conrad.  Maintaining separate carrier agreements, each with its own meetings, dedicated carrier staff support, compliance requirements and administrative overhead is less justifiable than in the past, especially given the sustained low-revenue environment seen in recent years.

In this regard, TSA executive administrator, Conrad noted that nearly all other major trade lanes with carrier agreements are represented by a single group which includes the entire round trip trade in its scope.

“The same lines carry the cargo in both directions on the same vessels, as part of their round-trip service rotations,” Conrad said. “Since they operate their business on round trip basis, it only makes sense to view the two segments as an integrated whole from an Agreement perspective as well.”